.ISiM^ 


-»4,i'J,vj|S>^-a$--'^Sr; 


YOURS    WITH    BEST    WISHES,    ASBURY    HARPENDING 
JUNE    20,    1915— AGE    76 


^ 


THE 


Cjreat  L)iamond  Hoax 


AND 


Other  Stirring  Incidents 


IN  THE  LIFE  OF 

ASBURY  HARPENDING 

nnnn 

EDITED  BY 
JAMES    H.    WILKINS 

DDDD 


Copyright   by 
A.    HARPENDING,    1913 


DDDD 


Tlie  James  H.  Barry  Co. 
San  Francisco. 


HARPENDING    CREST 


LIBRARY 

UNIVERSITY  OF  CAJJFORMA 

SAiMA  BARBARA 


To  my  friend,  unassuming  John  A.  Finch, 
of  Spokane,  Washington,  a  man  of  great 
ability,  possessing,  according  to  my  ideals, 
all  the  attributes  of  greatness,  as  a  token  of 
my  deep  esteem,  this  book  is  dedicated. 

The  Author. 


PREFACE. 


On  my  return  to  California,  after  an  absence  of  many 
years,  my  attention  was  called,  for  the  first  time,  to  the 
fact  that  my  name  had  been  associated  unpleasantly 
with  the  great  diamond  fraud  that  startled  the  financial 
world  nearly  half  a  century  ago.  Plain  duty  to  my 
family  name  and  reputation  compelled  me  to  tell  the 
whole  story  of  that  strange  incident  so  far  as  my  knowl- 
edge of  it  extends.  I  sincerely  trust  that  a  candid  read- 
ing of  these  pages  will  satisfy  the  public  that  I  was  only 
a  dupe,  along  with  some  of  the  most  distinguished 
financiers  of  the  last  generation.  Concerning  two  of 
the  historians  who  maligned  me,  I  am  without  redress. 
They  are  dead.  The  latest  author,  Mr.  John  P.  Young, 
repeated  the  accusation  of  his  predecessors  in  his  his- 
tory of  San  Francisco.  This  gentleman  has  admitted 
that  he  merely  copied  the  story  of  the  earlier  works, 
having  no  personal  knowledge  of  events  at  that  period, 
and  has  handsomely  admitted,  over  his  signature,  that 
he  unconsciously  did  me  an  injustice. 

To  the  diamond  story  I  have  added,  at  the  request  of 
friends,  some  of  my  experiences  and  reminiscences  of 
California   of  the  early  days. 

ASBURY   HARPENDING. 


CHAPTER  I. 
Early  Years — My  Voyage  to  California. 

My  father  was  one  of  the  largest  landed  proprietors 
of  Kentucky,  in  the  southwestern  section  of  the  State. 
That  was  still  on  the  frontier  of  the  Far  West.  Beyond 
stretched  the  land  of  enchantment  and  adventure — the 
plains,  the  mountains,  the  unbroken  solitudes,  the  wild 
Indians,  the  buffaloes  and  the  Golden  State  on  the  shore 
of  the  Pacific. 

Youngsters  whose  minds  are  occupied  today  with  base- 
ball and  tennis  and  who  still  retain  a  lingering  love  for 
taffy,  sixty  years  ago  on  the  frontier  were  dreaming  of 
wild  adventures  that  were  nearly  always  realized  to  some 
extent.  We  lived  on  the  border  line,  where  the  onward 
wave  of  emigration  broke  and  scattered  over  the  vast 
vacancies  of  the  West,  and  it  is  hardly  saying  too  much 
to  assert  that  fully  seven  boys  in  ten  were  caught  and 
carried  forward  with  the  flood  before  they  had  gone  very 
far  in  their  teens. 

For  myself,  I  simply  gave  up  to  the  spirit  of  the  times. 
At  the  age  of  fifteen  I  ran  away  from  college  to  join  an 
aggregation  of  young  gentlemen  but  little  older  than 
myself,  who  enlisted  under  the  banner  of  General  Walker, 
the  filibuster.  The  objective  was  the  conquest  of  Nic- 
aragua. The  Walker  expedition  sailed  to  its  destination 
and  what  followed  is  a  matter  of  well  known  history. 
But  for  my  companions  and  myself,  numbering  120  in 

11 


The  Great  Diamond  Hoax 

all,  it  ended  in  a  humiliating  disaster.  For,  as  we  sailed 
down  the  Mississippi  River  the  long  arm  of  Uncle  Sam 
reached  out  and  caught  us,  like  a  bimch  of  truant  kids. 
I  managed  to  elude  my  captors,  and  after  various  wan- 
derings and  strange  experience  made  my  way  to  the 
l^aternal  lionic  in  a  condition  that  made  the  Prodigal 
Son  look  like  30  cents. 

That  didn't  abate  the  wandering  fever  in  the  slightest 
and  in  order  that  I  might  not  commit  myself  to  another 
Walker  expedition,  my  father  consented  that  I  should 
try  my  luck  in  California  and  T  started  with  his  blessing 
and  what  seemed  to  me  a  liberal  grul)  stake.  T  had  just 
turned  sixteen. 

Instead  of  going  to  New  York  and  taking  passage 
from  that  port,  T  decided  to  travel  down  the  Mississippi 
River,  have  a  look  at  New  Orleans  and  leave  on  one  of 
the  various  steamers  there  that  connected  with  the  Pacific 
Mail  at  Darien. 

Here  an  unforeseen  calamity  very  nearly  upset  all  my 
plans.  My  money  consisted  of  currency,  issued  under 
the  auspices  of  the  various  States.  A  financial  storm  of 
some  kind  had  just  swept  the  cotmtry  and  the  currency 
became  legal  tender  only  in  the  borders  of  the  State  of 
issuance.  All  that  T  could  realize  on  mv  l)ills  was  barely 
enough  to  buy  a  steerage  ticket  to  California.  That, 
together  witli  five  dollars  in  gold  coin  and  a  revolver 
comprised  my  earthly  possessions. 

At  I'anama  we  were  crowded  into  a  small  steamer 
designed  for  about  400  ])asscngers,  but  nearly  1,000  were 
crammed  into  it.  Conditions  in  the  steerage  were  appal- 
ling.     Besides,   the  ship  was   under-provisioned   and   we 

12 


THE    AUTHOR    AT    16 

Taken   just   before    his    migration 

to    California 


My  Voyage   to   California 

soon  ran  sliort  of  anythinn'  like  vegetables  and  frnit. 
The  pnrser  had  thriftily  laid  in  a  large  private  sn])|)ly  of 
oranges  and  bananas  for  sale  in  San  Francisco.  These 
he  had  divided  into  two  caches.  The  hnng'ry  mob  seized 
on  one  of  them,  located  l)etween  decks,  in  the  night, 
and  cleaned  it  up  to  the  uttermost  peel.  Tlie  i)nrser 
knew  only  too  well  that  the  ne.xt  night  would  witness 
the  disappearance  of  the  balance  of  his  property.  He 
was  in  despair.     An  inspiration  seized  me. 

"How  much  will  you  take  cash  for  the  lot?"  I  asked 
him. 

"(nve  me  $10  for  them  and  it's  a  bargain,"  he  answered. 

I  fished  out  that  lonesome  $5  piece,  paid  it  on  account 
and  made  some  vague  excuse  about  getting  the  other 
five  from  my  bunk.  I  was  given  permission  also  to  hold 
a  fruit  auction  sale  on  the  upper  deck. 

Being  a  fruit  peddler  shocked  my  southern  ideas  of  a 
gentleman's  employment.  Nothing  but  downright  pov- 
erty could  have  driven  me  to  it.  However,  I  took  the 
edge  ofiF  the  thing  as  far  as  possible  by  employing  an 
itinerant  gambler,  also  dead  broke,  to  act  as  general 
salesman  and  orator  while  I  took  in  the  cash.  He  had  a 
voice  like  a  fog  horn  and  the  gall  of  a  highwayman. 
He  cried  our  wares  with  such  success  that  in  a  few 
minutes  the  whole  ship's  company  was  engaged  in  mad 
competition  to  buy  oranges  and  bananas  at  five  for  a 
half.  It  would  have  been  just  the  same  if  T  had  made 
the  price  five  for  a  dollar. 

Money  rolled  in  faster  than  I  could  count  it.  I  could 
see  that  my  chief  of  stafif  was  "knocking  down"  on  me 
in  a  shameless  way,  but  T  didn't  have  time  to  check  his 

15 


The  Great  Diamond  Hoax 

activities — in  fact,  I  didn't  care.  In  a  little  over  an  hour, 
the  last  orange  and  hanana  liad  vanished.  I  settled 
accounts  with  the  purser  and  counted  my  capital.  T  had 
a  little  over  $400  to  the  good,  enough  to  make  a  decent 
start  in   California. 

I  do  not  tell  this  incident  because  it  is  noteworthy  in 
itself.  Instances  were  then  so  common  of  needy  gentle- 
men who  extricated  themselves  from  the  financial  bog  by 
some  shift  which  in  other  days  they  would  have  thought 
ignoble — almost  disgraceful — that  this  event  would  not 
be  worth  recalling ;  but  in  the  peculiar  way  that  destiny 
is  w^orked  out,  it  had  a  decisive  part  in  directing  very 
important  matters  of  the  future.  And  it  has  been  my 
observation  that  the  most  impressive  movements  in  the 
lives  of  most  of  us  have  been  determined  more  by  chance 
than  by  a  fixed  purpose. 

Among  those  who  watched  my  fruit  sale  with  interest 
was  a  gentleman  named  Harvey  Evarts.  He  was  a 
successful  plumber  in  California  and  was  returning  from 
a  trip  to  the  "States,"  whither  he  had  gone  with  a  party 
of  bankers,  mine  owners  and  others  of  fortune  commen- 
surate with  his  own.  Plumbers  were  not  in  1857  the 
financial  giants  that  they  have  become  today.  Still  their 
stars  were  in  the  ascendant  and  ^Mr.  Evarts  was  one  of 
the  brilliant  luminaries  in  the  sky. 

This  gentleman  api^roached  me  after  the  sale.  I  had 
transferred  at  once  from  the  steerage  to  the  upper  deck, 
as  became  my  altered  fortune,  and  lie  congratulated  me 
in  a  pleasant  way  on  my  extraordinary  good  luck.  T 
told  him  all  about  myself  in  !)oy  fashion  and  when  we 
readied  San  I'rancisco  we  had  become  so  well  acquainted 

16 


My  Voyage  to   California 

that  Mr.  Evarts  invited  me  to  accompany  him  to  Cani])- 
tonvillc.  then  a  great  mining  district,  now  off  the  maj), 
so  far  as  the  yellow  metal  goes,  where  he  had  inijjortant 
interests. 

Placer  mining  was  on  the  toboggan  in  1857,  wdien  I 
arrived  in  California.  All  the  great  "bars"  and  gulches 
had  been  located  and  worked  out.  Very  few  individual 
strikes  were  made  after  that  date.  I  do  not  know 
whether  it  was  good  judgment  or  just  a  case  of  pure 
"nigger  luck,"  but  at  all  events  it  happened  that  even  in 
those  days  of  declining  fortune,  every  suggestion  that 
Mr.  Evarts  gave  me  turned  to  gold.  He  advised  me  to 
fake  a  chance  at  the  head  of  a  couple  of  abandoned 
gulches.  In  both  cases  I  struck  it  rich  enough  to  add 
$6,000  to  my  working  capital.  Again  he  suggested  a 
lease  of  a  hydraulic  mine  on  what  was  known  as  Rail- 
road Hill,  which  had  been  the  ruin  of  several  experienced 
miners.  I  followed  his  advice  and  after  being  brought 
to  the  verge  of  bankruptcy  struck  it  rich,  to  my  way  of 
thinking,  and  cleaned  up  finally  with  $60,000  to  my 
credit,  all  before  my  17th  birthday. 

I  visited  the  newly  discovered  Comstock  Lode.  Didn't 
like  it,  for  deep  mining  seemed  too  slow  a  way  of  making 
money.  Later  I  had  a  spectacular  race  with  Jim  Fair, 
then  a  hustling  prospector,  to  locate  a  mining  claim  in 
Utah.  But  the  tales  of  mountains  gorged  with  wealth 
vanished  when  we  got  there. 

Then  I  began  to  listen  to  a  lot  of  mining  camp  talk 
about  Mexico  and  its  riches.  California  and  Nevada 
were  growing  dull  to  my  way  of  thinking  and  I  turned 
my  thoughts  to  the  land  of  Montezuma. 

17 


CIIAPTRU    11. 

My  Experience  ix  Mexico. 

Hoiv   Luck   Again    Broiii;;Iif    Mr    Fortune. 

All  the  early  ,i;ol(l  seekers  of  California  had  some 
knowledge  of  Mexico.  The  great  argosies  of  the  ir'acific 
Mail  Steamship  Company  sto])ped  at  various  points,  such 
as  Acapulco,  ^Nlanzanillo  and  sometimes  at  Mazatlan. 
Thus  the  passengers  gained  a  sort  of  hurricane  deck 
impression  of  the  Latin  nation  to  the  southward.  I'.ut  it 
extended  no  further  than  these  glimpses  of  the  coast.  A 
veil  of  profound  mystery  and  romance  shut  out  a  view 
of  the  vast  interior.  Only,  we  knew  that  it  was  im- 
mensely rich  in  ])recious  metals,  hut  so  utterly  lawless 
and  overrun  with  bandits  that  nothing  short  of  a  stand- 
ing arm\-  could  protect  an  investment. 

Thus  none  of  the  adventurous  ])ioneers  attem])tcd  to 
explore  and  pros])ect  the  west  coast  of  Mexico,  which 
later  pottred  its  hundreds  of  millions  into  California.  1 
may  be  mistaken,  but  I  have  a  strong  im])ression  that  1 
was  the  first  of  a  long  line  of  miners  who  went  from 
San  h'rancisco  to  ^Mexico  and  laid  the  foundation  there 
for  mighty  fortunes. 

Very  nuich  like  Ja>on,  when  he  pushed  his  classic  junk 
from  Greece,  1  started  on  my  ventures  in  Mexico.  I 
bought  a  small  trading  vessel,  hired  an  excellent  crew, 
several  of   wlioin   s])okf  .S])anish,   took  ver\-  little  money 

18 


My  Experience  in  Mexico 

along-,  Ijut  a  lari^e  cargo  of  goods  suitable  to  the  wants 
of  the  country.  In  other  words,  I  figured  to  make  the 
expedition  finance  itself.  In  this  I  was  fairly  successful. 
After  sailing  up  the  Gulf  of  California  and  stopping  at 
various  ports,  we  arrived  at  Mazatlan,  my  original  ob- 
jective point,  my  cargo  sold  out. 

There  was  a  small  American  colony  at  Mazatlan  and 
several  groups  of  foreigners  of  other  nationalities,  all  of 
them  of  the  trading  class.  When  I  suggested  a  pros- 
pecting expedition  into  the  interior,  they  assured  me  it 
was  little  better  than  suicide ;  that  the  country  was  in 
the  absolute  possession  of  outlaws  of  the  most  desperate 
type,  and  that  a  prospector's  life  would  not  be  worth  ten 
cents  among  them. 

But  I  met  a  Mexican  gentleman  by  the  name  of  Don 
Miguel  Paredis,  who  told  me  a  very  dififerent  story.  He 
said  that  the  dangers  were  grossly  exaggerated — that 
there  was  really  little  to  fear  for  anyone  who  under- 
stood the  people.  As  a  guaranty  of  good  faith  he 
offered  to  go  with  me,  for  at  the  time  he  happened  to 
be  broke — not  an  unusual  incident  in  the  life  of  a  Mex- 
ican gentleman.  Moreover,  he  promised  to  lead  me  to  a 
mine  of  fabulous  riches,  in  the  mountains  of  Durango, 
about  two  hundred  miles  from  Mazatlan.  So  we  set  out 
with  a  complete  mining  outfit,  powder,  steel,  tools,  gen- 
eral equipment  and  provisions  for  six  months. 

Don  Miguel  certainly  understood  his  business.  We 
really  were  in  no  more  real  danger  than  if  we  had  been 
traveling  through  one  of  the  New  England  States.  We 
did  meet  some  uncommonly  tough-looking  citizens, 
armed  to  the  teeth,  but  Don  Miguel  always  rode  forward 

19 


The  Great  Diamond  Hoax 

to  iiKTt  llic'in.  handed  out  some  specious  ])alaver  in 
Spanish,  uliereupon  the  whole  party  would  disenihark 
from  their  nudes  or  horses,  embrace  each  other  on  the 
trail.  ])ass  around  some  more  palaver  and  part  with 
mutual  esteem.  The  Don  was  a  marvel  as  a  peacemaker 
and  1  mii^ht  add  that  for  genuine  good-fellowship  and 
clean  dealing  in  all  respects  he  was  one  of  the  finest  men 
of  any  nation  I  have  met  in  a  long  life. 

Finally,  we  reached  his  mine.  This  was  known  for 
vcars  after  as  the  Guadaloui)e  de  los  Angeles  mine.  He 
hadn't  exaggerated  its  riches,  hadn't  told  half  the  truth. 
The  vein  ran  straight  u])  the  almost  perpendicular  face 
of  a  narrow  gorge.  It  was  merely  a  case  of  breaking 
down  the  ore  as  in  an  open  cut.  There  were  no  shafts, 
tunnels,  drifts,  and  winzes  that  take  the  heart  out  of 
quartz  mining  as  a  rule.  And  the  ore  was  so  rich  that 
with  careful  sorting  it  was  ])ossible  to  make  large  car- 
goes average  $500  or  $600  a  ton. 

We  never  attempted  to  "beneficiate"  or  reduce  the  ore 
on  the  spot.  Don  ]\Iiguel  was  altogether  too  shrewd 
for  that.  Had  l)ullion  trains  gone  through  the  moun- 
tains from  our  camp  it  would  have  taken  a  standing 
army  to  protect  them.  We  sim])ly  bought  mules  and 
l)urros,  loaded  them  witli  rock  that  no  liandit  wanted, 
though  it  was  worth  ])er]ia])s  live  hundred  dollars  a  ton. 
It  very  seldom  failed  to  reach  the  seaboard,  where  there 
were  crude  reduction  works  and  plenty  of  purchasers 
of  ore. 

Even  our  inbound  ])ack  trains  of  costly  supplies  were 
unmolested.  Don  "Miguel  was  ffjrever  practicing  diplo- 
macy.     If   a    ro])ber   a])])eared    at   our   hacienda   he   was 

20 


My  Experience  in  Mexico 

received  like  a  friend  and  brother,  had  the  best  of  every- 
thing, couldn't  say  "mas  vino"  too  often,  was  handed  a 
liberal  "gratification"  or  tip  and  limitless  "felicidades"  on 
his  departure.  By  the  exercise  of  these  arts,  the  man- 
agement became  so  popular  that  on  several  occasions 
our  pack  trains  were  actually  protected  by  professional 
bandits  against  marauding  amateurs. 

We  never  had  a  bit  of  trouble  in  our  camp  with  the 
large  number  of  people  assembled  there.  This  also  was 
due  to  Don  Miguel's  forethought  and  knowledge  of  his 
people.  As  far  as  I  can  recollect,  give  the  average 
Mexican  plenty  of  grub,  plenty  of  music,  plenty  of 
dancing,  a  little  cheap  finery  in  dress,  and  the  rest  of 
the  world  can  wag  on  as  it  will,  for  aught  he  cares. 
He  does  not  take  kindly  to  abstractions,  doesn't  worry 
over  his  "wrongs,"  has  no  inclination  to  reorganize 
society;  only  wants  to  be  let  alone  to  enjoy  the  good 
things  of  life  according  to  his  own  simple  plan.  And 
when  you  get  down  to  brass  tacks,  his  is  not  a  bad 
philosophy,  after  all. 

Don  Miguel  arranged  it  so  that  otir  little  army  of 
employees  never  had  time  to  meditate  mischief.  He 
bought  them  all  kinds  of  musical  instruments,  including 
a  brass  band  on  which  they  became  proficient  in  a  won- 
derfully short  time.  Every  night  there  was  a  "bailc"  in 
the  plaza  at  which  the  people  danced  till  they  fell  from 
exhaustion.  He  ofifered  cash  prizes — mig"hty  stiff  ones — 
for  the  best  dancers,  male  and  female — the  choice  to  be 
determined  among  themselves  by  a  plebiscite  or  by  select 
committee.  Also,  on  Sundays,  we  had  a  bull  fight.  It 
wasn't  of  the  sanguinary  description  ;  the  bulls  weren't 

21 


The  Great  Diamond  Hoax 

killed,  but  were  thriftily  kept  in  cold  storage  to  fight 
another  day.  It  made  a  satisfactory  sport  for  the 
people,  and  was  also  inexpensive.  Added  to  this,  we 
paid  high  wages  in  hard  cash  and  kept  in  stock  at  our 
store  an  assortment  of  articles  for  personal  decoration 
at  prices  tliat  were  highly  profitable  but  not  prohibitive. 

Thus  our  enterprise  became  a  big  success  from  every 
standpoint.  At  a  time  when  nearly  all  the  mines  in  the 
Sierra  Mad  re  were  closed  down — practically  abandoned 
— we  were  swinging  along  under  a  full  head  of  steam, 
\\ith()ul  tlie  slightest  interruption,  witli  the  general  good 
will  of  all  with  whom  we  came  in  contact.  Besides,  we 
were  making  money  at  a  rate  sufficient  to  turn  one's 
brain.  I  doubt  if  ever  such  a  return  was  made  on  the 
trifling  sum  invested.  There  had  been  no  development 
expense.  The  mine  paid  from  the  very  day  we  began 
to  operate  it. 

\Miile  I  was  the  "capitalist"  and  owned,  by  our  agree- 
ment, two-thirds  of  the  property,  I  allowed  Don  Miguel 
an  absolute  free  hand  in  all  matters  of  policy :  wherein 
T  showed  a  wisdom  superior  to  my  years.  And  T  fol- 
lowed his  advice  in  one  matter  so  important  that  T  must 
mention  it  for  the  general  good  of  mankind. 

The  women  of  the  Mexican  Sierra  are  remarkalile 
for  their  physical  charms.  There  were  many  real 
beauties  resident  in  our  camp — "simpaticas,"  they  used 
to  call  them — which  doesn't  mean  ''s\'m])athctics,"  but 
"good  lookers."  Now,  I  have  always  believed  that  a 
good  looking  woman  was  made  to  be  looked  at,  to  be 
admired:  f)thcrwise,  wherefore  was  she  created?  Down 
in   Mexico  T  could  no  more  fail  to  notice  a  "simpatica" 

22 


My  Experience  in   Mexico 

as  she  passed  1)\',  than  I  could  close  my  eyes  to  the 
beauties  of  nature. 

Observing'  which,  Don  Miguel  gave  me  a  ]3iecc  of 
advice  which  every  reader  of  this  chapter  who  may 
happen  to  visit  Mexico  should  write  down  for  future 
reference. 

"Leave  our  women  alone,"  he  counseled  me.  "They 
arc  romantic,  soft-hearted  and  will  meet  you  half  way, 
but  no  matter  how  innocent  your  intercourse,  it  will 
rouse  jealous}-,  ill-will  and  serious  danger.  Nearly  all 
the  foreigners  who  get  into  troulilc  in  IMexico  can  trace 
it  to  this  source." 

T  realized  the  truth  of  this  later  when  a  young  friend 
of  mine  called  Eaton,  who  was  a  fine  fellow  but  an 
ardent  imitator  of  Lothario  the  Gay,  was  shot  down  in 
a  lonely  spot,  jealousy  being  the  evident  motive. 

Tn  the  fall  of  1860  I  returned  to  San  Francisco,  as  T 
thought  for  a  brief  trip.  Just  to  show  myself,  in  fact. 
Among  other  things,  I  brought  a  few  tons  of  ore  that 
sold  for  $3,000  a  ton,  .the  sight  of  which  made  the  town 
delirious.  I  found  that  my  fame,  or  rather  various 
romances,  had  preceded  me.  I  wasn't  quite  twenty, 
couldn't  vote,  couldn't  make  a  legal  contract,  yet  I  had 
over  a  quarter  of  a  million  in  hard  cash  to  my  credit 
in  bank,  and  my  mine  in  Mexico  was  worth  a  million 
more.  These  were  the  actual  facts,  which  were  exag- 
gerated and  distorted  beyond  all  resemblance  to  the 
truth.  My  wealth  was  at  least  quadrupled,  and  I  was 
dragged  through  a  series  of  bloodcurdling  ex]:)eriences 
in  Mexico  without  a  parallel  in  fiction. 

Thus,  you  can   see  how  the  orange   and  banana   sale 

23 


The  Great  Diamond  Hoax 

incident  set  the  wheels  of  fate  revolvinL;-.  If  I  had 
come  to  California  with  sufficient  money,  I  would  have 
made  some  kind  of  a  blind  stagger  at  luck,  thrown  up 
the  sponge  in  disgust  after  a  few  months,  and  written 
to  my  father  for  a  remittance  to  come  home. 

As  it  was.  I  quietl\-  took  rank  with  the  great  figures 
of  the  State  before  I  had  reached  my  majority,  and 
became  a  leading  actor  in  an  imwritten  page  of  history, 
wlien  the  destinies  of  California  himg  1)y  the  veriest 
thread. 


24 


CHAPTER  III. 

Story  of  Southern   Plan  to  Make  California   Se- 
cede From  the  Union  Is  Told  for  First  Time. 

Narrator    Describes    His   Invitation    Into    Band    of   jo, 
IVhicJi  Planned  to  Organise  Republic  of  Pacific. 

I  had  barely  reached  San  Francisco  when  the  elec- 
tion of  1860  took  place,  resulting  in  the  choice  of  Abra- 
ham Lincoln  as  President  of  the  United  States.  All 
through  the  South  this  was  accepted  as  the  signal  for 
a  civil  contest.  The  work  of  organization  went  ahead 
with  feverish  haste  and  long  before  the  inauguration 
of  the  new  President  the  authority  of  the  Federal  Gov- 
ernment was  paralyzed  in  most  of  the  slave  States. 

The  attitude  of  California  was  a  matter  of  supreme 
moment,  not  understood,  however,  at  the  time.  Had 
this  isolated  State  on  the  Pacific  joined  the  Confed- 
erate States,  it  would  have  complicated  the  problems 
of  war  profoundly.  With  the  city  of  San  Francisco 
and  its  then  impregnable  fortifications  in  Confederate 
hands  the  outward  flow  of  gold,  on  which  the  Union 
cause  depended  in  a  large  measure,  would  have  ceased, 
as  a  stream  of  water  is  shut  off  by  turning  a  faucet. 
It  was  the  easiest  thing  in  the  world  to  open  and 
maintain  connection  through  savage  Arizona  into 
Texas,  one  of  the  strongholds  of  the  South.  It  does 
not  need  a  military  expert  to  figure  out  what  a  vital 

25 


The  Great  Dianioiici   Moax 

advantage  to  the  Confederacy  the  control  of  the  Ta- 
cific  wonld  liave  |)r()ved. 

Ilistory  rehites  in  a  few  l)rief  words  liow  the  seces- 
sion movement  here  was  extinguished  l)y  a  wild  ont- 
hnrst  of  patriotism.  I  am  now  going  to  relate  for  the 
first  time  the  inside  story  of  the  well-planned  efifort 
to  carry  California  ont  of  the  Union  and  by  what 
a  narrow  margin  it  finally  failed  (jf  accomplishment 
when  success  was  absolutely  secured. 

I  was  young,  hot-headed,  filled  with  the  bitter  sec- 
tional feeling  that  was  more  intense  in  the  border 
States  than  in  the  States  farther  north  or  south.  It 
would  have  been  hard  to  find  a  more  reckdess  seces- 
sionist than  myself.  1  moved  among  my  own  people, 
got  off  all  sorts  of  wild  talk  about  spending  the  last 
dollar  of  my  money,  and  my  life,  if  need  be,  to  resist 
the  tyrant's  yoke,  and  so  forth,  and  was  actually  about 
to  leave  for  my  home  in  Kentucky  to  be  ready  for  the 
iiupending  struggle,  when  a  (]uiet  tij)  was  given  me 
that  more  important  work  was  cut  out  where  I  was. 
M}-  exaggerated  wealth  and  the  irresponsible  stories 
of  my  Mexican  exploits,  made  me  an  actor  in  a  great, 
silent  drama,  despite  my  years  and  boyish  look. 

One  afternoon  I  was  told  to  be  at  the  house  of  a 
well-known  Southern  sympathizer  at  9  o'clock  in  the 
evening.  It  was  well  apart  from  other  buildings,  with 
entrances  in  several  directions.  'I'he  gentleman  wdio 
owned  it  lived  alone,  with  only  Asiatic  attendants, 
who  understood  little  English  and  cared  less  for  wdiat 
was  going  on.  A  soft-footed  domestic  opened  the 
door,  took  my  card,  and  presently  I  was  ushered  into 

26 


Plan  to  Make  California  Secede 

a  large  room  where  a  number  of  gentlemen,  most  of 
them  young  but  well  established,  were  seated  at  a 
long  table.  I  recognized  among  them  leading  men  of 
San  Francisco  of  various  walks  of  life. 

The  spokesman,  a  great  man  of  alTairs,  told  mc  that 
I  was  trusted,  that  I  had  been  selected  as  one  to  lead 
in  an  affair  of  great  peril,  an  enterprise  on  which  the 
future  of  the  South  might  depend,  and  asked  me  if 
I  were  ready  to  risk  life  and  fortune  on  the  turn.  I 
answered  with  an  eagerness  that  satisfied  my  hearers 
and  took  an  oath,  of  which  T  have  a  copy,  reading  as 
follows : 

''Do  you,  in  the  presence  of  Almighty  God,  swear 
that  what  I  may  this  night  say  to  or  show  you  shall 
be  kept  secret  and  sacred,  and  that  you  will  not  by 
hint,  action  or  word  reveal  the  same  to  any  living' 
being,  so  help  me  God?" 

The  answer,  of  course,  being  an  affirmative,  I  re- 
peated after  the  spokesman  the  following  objuration  : 

"Having  been  brought  to  this  room  for  the  purpose 
of  having  a  secret  confided  to  me  and  believing  that 
to  divulge  such  secret  would  imperil  the  lives  of  cer- 
tain Southern  men  as  well  as  injure  the  cause  of  the 
Southern  States,  I  do  solemnly  swear  in  the  name  of 
the  Southern  States,  within  whose  limits  I  was  born 
and  reared,  that  I  will  never,  by  word,  sign  or  deed, 
hint  at  or  divulge  what  I  may  hear  to-night.  Not  to 
my  dearest  friend,  not  to  the  wife  of  my  bosom  will 
I  communicate  the  nature  of  the  secret.  I  hold  my- 
self pledged,  by  all  I  hold  dear  in  heaven  or  on  earth, 

27 


The  Great  Diamond  Hoax 

by  God  and  my  country,  by  my  honor  as  a  Southern 
gentleman,  to  keep  inviolate  the  trust  reposed  in  me. 
I  swear  that  no  consideration  of  property  or  friend- 
ship shall  influence  my  secrecy,  and  may  I  meet  at 
the  hands  of  those  I  betray,  the  vengeance  due  to  a 
traitor,  if  I  prove  recreant  to  this  my  solemn  obliga- 
tion.    So  help  me  God,  as  I  prove  true." 

This  oath  was  committed  to  memory  by  every 
member.  At  subsequent  meetings  it  was  solemnly 
recited  by  all,  standing  and  with  right  hand  uplifted, 
before  proceeding  to  further  business.  Several  years 
afterwards,  while  it  was  still  fresh  in  my  recollection. 
I  set  it  down  in  writing  and  preserved  it  to  the  pres- 
ent day.  Thus  I  became  one  of  a  society  of  thirty 
members,  pledged  to  carry  California  out  of  the  Union. 

I  might  say  here,  in  parenthesis,  that  I  have  long 
been  a  reconstructed  "rebel."  The  old  flag  floats  over 
my  home  on  every  national  holiday  and  also  on  Labor 
day,  for  I  take  an  interest  in  the  ideas  it  represents. 
I  am  mighty  glad  now  that  my  etlorts  to  disrupt  the 
Union  failed  and  still  gladder  because  it  has  been  my 
good  fortune  to  see  the  awful  heritage  of  hate  that  so 
long  divided  two  brave  and  generous  people  die  out 
and  disappear. 

The  Southern  mind  has  a  wonderful  capacity  for 
secret  organization  and  for  conducting  operations  on 
a  vast  scale  behind  a  screen  of  impenetrable  mystery. 
This  had  a  fine  illustration  in  the  workings  of  the 
Ku-Klux-Klan,  in  reconstruction  days,  which  destroyed 
carpet-bag  rule  and  negro  supremacy  in  the  South 
and  restored  the  government  of  the  white  race.     The 

28 


Plan  to  Make  California  Secede 

operations  of  the  committee  of  thirty  of  whiclT  1  be- 
came a  member  demonstrated  the  same  pecnliar  trait. 

The  organization  was  simplicity  itself.  We  were 
under  the  absolute  orders  of  a  member  wdiom  we 
called  "General."'  He  called  all  the  meetings,  by  word 
of  mouth,  passed  by  one  of  the  members.  Anything 
in  the  way  of  writing  was  burned  before  the  meeting 
broke  up.  The  General  received  the  large  contribu- 
tions in  private,  never  drew  a  check,  settled  all  ac- 
counts in  gold  coin  and  accounted  to  himself  for  the 
expenditure. 

Each  member  was  responsible  for  the  organization 
of  a  fighting  force  of  say  a  hundred  men.  This  was 
not  difficult.  California  at  that  period  abounded  with 
reckless  human  material — ex-veterans  of  the  Mexican 
war,  ex-filibusters,  ex-Indian  fighters,  all  eager  to  en- 
gage in  any  undertaking  that  promised  adventure  and 
profit.  Each  member  selected  a  trusty  agent,  or  cap- 
tain devoted  to  the  cause  of  the  South,  simply  told 
him  to  gather  a  body  of  picked  men  for  whose  equi]> 
ment  and  pay  he  would  be  responsible,  said  nothing 
of  the  service  intended,  possibly  left  the  impression 
that  a  filibuster  expedition  was  in  the  wind.  These 
various  bands  were  scattered  in  out-of-the-way  places 
around  the  bay,  ostensibly  engaged  in  some  peaceful 
occupation,  such  as  chopping  wood,  fishing  or  the  like, 
but  in  reality  waiting  for  the  word  to  act.  Each  mem- 
ber of  the  committee  kept  his  own  counsel.  Only  the 
General  knew  the  location  of  the  various  detachments. 

Our  plans  were  to  paralyze  all  organized  resistance 
by    a    simultaneous    attack.      The    Federal    army    was 

29 


The  Great  Diamond  Hoax 

little  more  than  a  shadow.  About  two  hundred  sol- 
diers were  at  Fort  Point,  less  than  a  hundred  at  Al- 
catraz  and  a  liandful  at  Mare  Island  and  at  the  ar- 
senal at  Benicia,  where  30,000  stand  of  arms  were 
stored.  We  proposed  to  carry  these  strong-holds  bv 
a  nii^ht  attack  and  also  seize  the  arsenals  of  tlie  mili- 
tia at  San  Francisco,  ^\'ith  this  aboundini^  military 
ecjuipment.  we  proposed  to  org-anize  an  army  of  South- 
ern sympathizers,  sufficient  in  number  to  beat  down 
any  unarmed  resistance. 

All  of  which  may  seem  chimerical  at  this  late  day, 
but  then,  take  my  word,  it  was  an  opportunity  abso- 
lutely within  our  t^ras]).  At  least  30  ])er  cent,  of  the 
population  of  California  was  from  the  South.  The 
large  foreign  element  was  either  neutral  or  had  South- 
ern leanings.  W'c  had  already,  under  practical  disci- 
pline, a  body  of  the  finest  fighting-  men  in  the  world, 
far  more  than  enough  to  take  the  initial  step  with  a 
certainty  of  success. 

And  those  who  might  have  ofYered  an  effective  re- 
sistance were  lulled  in  fancied  security  or  indifferent. 
It  is  easy  to  talk  now,  half  a  century  after  the  event, 
but  in  1860  the  tics  that  l)ound  the  Pacific  to  the 
Government  at  Washington  were  nowhere  very  strong. 
The  relation  meant  an  enormous  loss  to  California. 
For  all  the  immense  tribute  ])ai(l.  the  meager  returns 
consisted  of  a  few  public  buildings  and  ])ul)lic  works. 
Besides  thousands  were  tired  of  being-  ruled  from  a 
distance  of  thousands  of  miles.  The  "Repid:)lic  of  the 
Pacific,"   that  we  intended   to   organize   as  a   ])rclimi- 

30 


Plan  to  Make  California  Secede 

nary,  would  have  been  well  received  by  many  who 
later  were  most  clamorous  in  the  sni)])ort  of  the  Fed- 
eral Government. 

Everything  was  in  readiness  by  the  middle  of  Jan- 
uary, 1861.     It  only  remained  to  strike  the  blow. 


31 


CHAPTER    I\*. 

Southern  General,  Ai.p.ert  Sidney  Johnston,  Played 
Important  Part  in  Preventing  Organized  Revolt 
FOR  Secession. 

Discoi'cry  of  Coinstock  Lode  With  Its  J\ist  Hoard  of 
Gold  AiiotJicr  Factor  in  Kccpiir^  This  State  in  the 
Union. 

General  Albert  Sidney  Johnston  was  in  command  of 
tlic  military  department  of  the  Pacific.  He  had  grad- 
uated from  West  Point  in  1826  and  saw  seven  years  of 
active  service  on  the  frontier,  especially  in  the  famous 
Black  Hawk  war.  He  resigned  from  the  service  on 
account  of  his  wife's  failing  health,  and  settled  in  Texas. 
On  the  uprising  against  Mexican  rule,  he  had  enlisted 
as  a  private  soldier  in  the  army  of  his  new  country,  but 
through  the  compelling  force  of  genius  soon  became 
commander-in-chief  of  the  republic's  forces.  At  the  time 
of  the  annexation  of  Texas,  he  was  its  secretary  of  war. 
When  the  war  w  itii  Mexico  broke  out,  he  ofifered  his 
services  to  the  United  States,  fought  in  many  of  the 
severe  engagements,  rose  to  the  rank  of  general,  was 
sent  to  Utah  to  suppress  wliat  was  known  as  the  "Mor- 
mon I\fl)cl]ion."  wliicli  he  accomplished  with  firnuiess 
and  tact,  in  January,  1861,  he  was  placed  in  command 
of  the  Department  of  the  Pacific. 

Johnston  was  Ijorn  in  l\entuck\-  but  he  always  in  later 

32 


ALBERT    SIDNEY    JOHNSTON 

Commanding    the    Military    District    of 

the   Pacific    in    1861 


Albert  Sidney  Johnston 

years  spoke  of  and  considered  Texas  his  State.  Thus 
he  had  a  double  bond  of  sympathy  for  the  South.  This 
was  the  man  who  had  the  fate  of  CaUfornia  absohitcly 
in  his  hands.  No  one  doubted  the  drift  of  his  incHna- 
tions.  No  one  who  knew  the  man  and  his  exacting 
sense  of  lionor  doubted  his  absolute  loyalty  to  any  trust. 

In  all  of  our  deliberations,  General  Johnston  only 
figured  as  a  factor  to  be  taken  by  surprise  and  subdued 
with  force.  We  wished  him  well,  hoped  he  might  not 
sufifer  in  the  brief  struggle,  but  nobody  dreamed  for 
an  instant  that  his  integrity  as  a  commander-in-chief  of 
the  army  could  be  tampered  with. 

One  of  the  most  brilliant  members  of  the  early  San 
Francisco  bar  was  Edmond  Randolph.  He  was  a  man 
of  rare  talents  and  great  personal  charm.  Born  in 
Virginia,  a  member  of  the  famous  Randolph  family,  he 
was  naturally  an  outspoken  advocate  of  the  South.  He 
was  one  of  our  committee,  and  on  terms  of  social  and 
professional  intimacy  with  every  one  of  Southern  lean- 
ings. He  was  on  the  closest  terms  with  General  John- 
ston and  there  is  hardly  a  doubt  that,  purely  on  his  own 
motion,  he  approached  the  General  with  some  kind  of  a 
questionable  proposition.  What  happened  at  that  inter- 
view no  man  knows,  but  Johnston's  answer  made  Ran- 
dol]ih  stark  crazy.  He  indulged  in  all  kinds  of  loose, 
unbridled  talk,  told  several  of  our  committee  that  he 
had  seen  Johnston,  that  the  cause  was  lost  and  other- 
wise, in  many  ways,  exhibited  an  incredible  indis- 
cretion that  might  easily  have  been  fatal  to  our  cause. 
No  amoimt  of  warning  was  able  to  silence  his  un- 
balanced tongue. 

35 


The  Great  Diamond  Hoax 

This  situation  was  discussed  at  several  meetings  and 
finally  it  was  decided  that  a  committee  of  three  should 
visit  General  Johnston  in  a  social  way,  not  to  commit 
further  folly  by  any  intimation  or  suggestion,  but  to 
gather,  if  possible,  some  serviceable  hints  for  future  use. 
I  had  become  prominent  in  covmcil  through  my  zeal  and 
discretion,  and  to  my  great  joy  I  was  named  as  one 
of  the  three. 

I  will  never  forget  that  meeting.  We  were  ushered 
into  the  presence  of  General  Albert  Sidney  Johnston. 
He  was  a  blond  giant  of  a  man  with  a  mass  of  heavy 
yellow  hair,  untouched  by  age,  although  he  was  nearing 
sixty.  He  had  the  nobility  of  bearing  that  marks  a 
great  leader  of  men  and  it  seemed  to  my  youthful  im- 
agination that  I  was  looking  at  some  superman  of  an- 
cient history,  like  Hannibal  or  Caesar,  come  to  life  again. 

He  bade  us  courteously  to  be  seated.  "Before  we  go 
further,"  he  said,  in  a  matter-of-fact,  off-hand  way, 
"There  is  something  I  want  to  mention.  I  have  heard 
foolish  talk  about  an  attempt  to  seize  the  strongholds 
of  the  government  under  my  charge.  Knowing  this.  I 
have  prepared  for  emergencies,  and  will  defend  the 
property  of  the  United  States  with  every  resource  at  my 
command,  and  with  the  last  drop  of  blood  in  my  body. 
Tell  that  to  all  our  Southern  friends." 

Whether  it  was  a  direct  hint  to  us,  I  know  not.  We 
sat  there  like  a  lot  of  petrified  stoten-bottles.  Then  in  an 
easy  way,  he  launched  into  a  general  conversation,  in 
which  we  joined  as  best  we  might.  After  an  hour,  we 
departed.  We  had  learned  a  lot.  but  not  what  we 
wished   to  know. 

36 


Albert  Sidney  Johnston 

Of  course  the  foreknowledge  and  inflexible  stand  of 
General  Johnston  was  a  body  IjIow  and  facer  combined. 
There  was  another  very  disturbing-  factor — the  Coni- 
stock  lode. 

While  we  were  deliberating,  that  marvelous  mineral 
treasure  house  began  to  open  up  new  stores  of  wealth. 
Speculation  was  enormous.  The  opportunity  for  making 
money  seemed  without  limit.  Many  of  the  committee 
were  deeply  interested. 

Now  it  had  been  determined  absolutely  from  the  out- 
set that  our  ambitions  were  to  be  bounded  by  the  easily 
defended  Sierra.  We  knew  enough  about  strategy  to 
understand  that  it  would  be  simple  madness  to  cross 
the  mountains.  That  meant,  of  course,  the  abandon- 
ment of  Nevada. 

This  had  been  accepted  with  resignation  when  the 
great  mines  were  considered  played  out.  But  when  it 
became  apparent  that  the  surface  had  been  barely 
scratched  and  that  secession  might  mean  the  casting 
aside  of  wealth  beyond  the  dreams  of  avarice,  then  pa- 
triotism and  self-interest  surely  had  a  lively  tussle.  If 
Nevada  could  have  been  carried  out  of  the  Union  along 
with  California,  I  am  almost  certain  that  the  story  of 
those  times  would  have  been  widely  different.  We  cer- 
tainly had  the  organized  forces  to  carry  out  our  plans. 

That's  the  only  way  I  can  size  up  what  followed. 
The  meetings  began  to  lack  snap  and  enthusiasm.  Just 
when  we  should  have  been  active  and  resolute,  some- 
thing always  hung  fire. 

The  last  night  we  met,  the  face  of  our  General  was 


The  Great  Diamond  Hoax 

careworn.  After  the  usual  oath,  he  addressed  the  com- 
mittee. It  was  plain,  he  said,  that  the  members  were 
no  longer  of  one  mind.  The  time  had  now  come  for 
definite  action,  one  way  or  another.  He  proposed  to 
take  a  secret  ballot  that  would  be  conclusive. 

The  word  "yes"  was  written  on  thirty  slips  of  paper ; 
likewise  the  word  "no."  The  slips  were  jumbled  up 
together  and  were  placed  alongside  of  a  hat  in  a  recess 
of  the  large  room.  Each  member  stepped  forward  and 
dropped  a  slip  in  the  hat.  "Yes"  meant  action;  "no" 
disbandment.  When  all  had  voted,  the  General  took 
the  hat,  opened  the  ballots  and  tallied  them  ;  then  threw 
everything  in  the  fire.  "I  have  to  announce,"  he  said, 
"that  a  majority  have  voted  'no'.  I  therefore  direct  that 
all  our  forces  be  dispersed  and  declare  this  committee 
adjourned  without  day." 

Not  another  word  was  spoken.  One  by  one  the 
members  departed.  All  T  can  say  is  that  they  kept  their 
secret  well. 

Two  days  later,  all  the  various  bands  had  been  paid 
ofif  and  dispersed.  The  "great  conspiracy,"  if  you  wish 
to  call  it  so,  had  vanished  into  the  vast,  silent  limbo  of 
the  past. 

Only  the  General  knew  the  extent  of  tlic  dislnirse- 
ments.  My  own  impression  is  that  they  far  exceeded  a 
million  dollars.  I  contributed  $100,000  myself,  which, 
of  course,  was  an  incident  of  the  financial  recklessness 
of  youth. 

Many  of  the  committee  rose  to  great  social  and  pub- 
lic prominence.  The  "General"  died  not  so  long  ago, 
full  of  years  and  honors. 

38 


Albert  Sidney  Johnston 

Besides  myself,  there  is  one  survivor,  whose  name 
would  sur])rise  the  nation. 

(  Since  the  ahove  was  tirst  printed,  this  survivor  has 
died.) 


39 


CHAPTER  Y. 

Kaxdhi.ph  ^>K•l■l^\^■l■:I)  Coxspiracv  for  Rkxoi.t  in  Cali- 
fornia, AND  Wkcjte  Letter  to  Lincoln  that 
Caused  Johnston's   Removal. 

I  could  not  close  this  phase  of  the  story  without 
further  reference  to  Edniond  Randolph,  for  I  sincerely 
want  to  set  him  right.  I  said  he  went  mad.  Every- 
thing later  proved  it.  He  not  only  committed  the 
gravest  indiscretions,  but  in  addition  he.  a  Southern 
man,  with  a  couple  of  centuries  of  Southern  traditions 
behind  him,  actually  wrote  a  letter  to  President  Lin- 
coln warning  him  of  a  vast  conspiracy  to  carry  Cali- 
fornia out  of  the  L'nion  and  questioning  the  trust- 
worthiness of  General  Johnston.  Nothing  but  down- 
right lunacy  could  have  inspired  the  act.  This  was 
sent  to  President  Lincoln  by  pony  express  and 
reached  him  just  about  the  day  of  his  inauguration. 
The  story  has  been  often  printed  before  or  I  would 
not  revive  it  now.  Its  accuracy  has  indeed  been  ques- 
tioned by  Randolph's  friends.  1  am  inclined  to  believe 
it  true. 

As  a  consequence  General  E.  V.  Sumner  was  sent 
on  a  tug  from  New  York  with  sealed  orders  and 
placed  on  board  a  Pacific  Mail  steamer  in  midoccan. 
On  the  steamer  the  orders  were  opened.  They  di- 
rected him  to  proceed  to  San  Francisco  and  relieve 
General  Jolmston  of  the  command  of  the  De])artment 

40 


Randolph  Betrayed  Conspiracy 

of  the  Pacific.  History  relates  further  tliat  (icneral 
Sumner  was  taken  from  the  steamer  by  a  Government 
vessel  outside  the  Golden  Gate,  hurried  to  Alcatraz, 
where  General  Johnston  had  headquarters,  and,  in  a 
sensational  manner,  relieved  him  of  liis  command. 

The  latter  part  is  purest  fiction.  General  Johnston 
nexcr  had  headquarters  on  Alcatraz.  He  lived  with 
his  family  on  Rincon  Hill,  near  the  residence  of  Louis 
Garnett.  Sumner  arrived  in  San  Francisco  on  the 
steamer,  publicly,  like  anyone  else.  General  John- 
ston, informed  of  his  arrival,  at  once  arranged  for  a 
conference  and  the  two  met  in  perfect  amity  at  the 
old  army  headquarters,  located  on  Bush  street,  if  I 
recollect  aright.  The  transfer  of  authority  took  place 
the  next  day.  There  are  abundant  living  witnesses 
to  these  facts.  General  Johnston's  resignation  was 
in  President  Lincoln's  hands  long  before  Sumner 
reached  California  and  the  same  was  accepted  a  few 
weeks   later. 

One  of  General  Sumner's  first  acts  w^as  to  order 
arms  from  the  arsenal  and  organize  patriotic  citizens 
for  an  expected  crisis.  But  they  were  simply  fight- 
ing windmills.  The  real  crisis  had  disappeared  of  it- 
self two  months  before,  through  General  Johnston's 
firmness^and  the  Comstock  lode. 

As  a  further  proof  of  Randolph's  madness,  he 
straightway  developed  into  an  outspoken,  rabid  seces- 
sionist, made  speeches  of  the  most  infiammatory 
nature  and  it  was  highly  significant  that  he  csca])e(l  im- 
prisonment   in    Alcatraz.      He    died    within    the    year,    a 

41 


The  Great  Diamond  Hoax 

])hvsical  and  mental  wreck.  In  my  humble  judgment 
he  deserves  sincere  pity,  not  blame. 

That  some  one  of  important  station  wrote  a  myste- 
rious letter  to  President  Lincoln  which  caused  the  re- 
tirement of  General  Johnson  is  beyond  dispute. 

One  of  the  versions  of  the  story  has  iicvcr  l)een 
l)ublished,  to  my  knowledge.  In  1880.  when  Mr. 
Justice  Field  was  candidate  for  President,  he  flooded 
the  South  with  literature  concerning'  his  friendship 
for  that  section,  as  evidenced  by  various  decisions 
of  the  United  States  Supreme  Court  in  the  dark  days 
of  reconstruction.  In  the  North,  ])rincipally  among 
tlie  Crand  Army,  a  pamphlet  was  circidatcd  to  the 
effect  that  he  had  saved  California  to  the  L'nion  by 
a  timely  letter  to  President  Lincoln,  which  resulted 
in  General  Sumner's  hasty  mission.  \\'hethcr  it  was 
authorized  by  Judge  Field,  I  do  not  know.  Put  it  fell 
into  the  hands  of  the  Southern  leaders  and  doomed 
his  candidacy  in  the  section  where  he  counted  on 
support.  Not  at  all  because  he  had  saved  the  Union. 
l)ut  because  of  the  implied  aspersion  on  the  memory 
of  one  who  will  ever  be  dear  to  the  South — a  gentle- 
man of  unimpeachable  honor,  a  great  soldier  who 
died  a  soldier's  death,  fighting  for  the  Lost  Cause. 

After  he  resigned.  General  jnhnston  earnestly  ad- 
vised man}-  Southerners,  some  of  them  still  ali\e.  to 
do  nothing  that  would  bring  war  to  California.  "If 
you  want  to  fight,  go  South."  was  his  constant  coun- 
sel to  all.  Many  followed  his  adxice.  Hundreds, 
perha])s  thousands,  of  them  were  cut  off  by  Indians 
in    Arizona,    where    the    savages    had    full    swing,    all 

42 


Randolph  Betrayed  Conspiracy 

the  frontier  army  posts  having  been  abandoned. 
General  Johnston  stayed  in  California  till  his  State — 
Texas — seceded.  Then  with  a  few  followers  he  tra- 
versed the  savage  wilderness  and  after  many  adven- 
tures reached  the  South. 

There  is  a  rather  pathetic  sidelight  to  the  story  that 
illustrates  the  simple  devotion  of  the  old-time  slaves 
to  their  white  masters.  General  Johnston  had  freed 
all  his  slaves  before  he  came  to  California.  One  of 
them,  called  "Rand,"  brief  for  "Randolph" — he  had 
no  other  name — followed  him  as  a  body-servant  to 
the  Pacific.  When  Johnston  left  for  the  South  he 
ordered  "Rand"  to  stay  behind.  He  was  a  famous  cook 
and  could  have  commanded  big  wages  in  a  high-class 
restaurant.  But  the  faithful  body-servant  would  not 
be  denied.  He  fought  his  way  with  his  former  mas- 
ter through  the  Apaches  of  Arizona  and  was  with 
him  at  Shiloh  when  he  died.  He  hung  over  the  dead 
body  of  the  fallen  leader  in  a  wild  passion  of  primi- 
tive grief. 

Later  some  hundred  colored  body-servants  of  Gen- 
eral Johnston's  appeared  at  various  parts  of  the 
South.  The  real  "Rand"  settled  in  Louisville,  where 
he  was  an  object  of  solicitous  regard  on  the  part 
of  the  Johnston  family  and  others  of  the  old  regime. 

"Rand"  proved  himself  no  less  great  in  peace  than 
war,  for  he  married  a  widow  with  seven  children,  an 
act  that  needed  moral  courage  of  the  highest  sort. 
His  career  was  somewhat  checkered,  but  he  was  al- 
ways well  looked  after,  and  "looking  after"  "Rand" 
was  often  quite  a  job. 

43 


The  Great  Diamond  Hoax 

He  became  something'  of  a  character  in  the  border 
city;  resolutely  declined  to  be  "reconstructed"  and 
remained  an  unrepentant  rebel  to  the  last.  He  was 
very  bitter  in  his  talk  about  the  "poor  white  trash" 
of  the  North.  A\'hen  he  uncorked  the  vials  of  his 
wrath  he  called  his  adversary  an  "abolitionist"  as  the 
last  word  of  scorn. 

In  his  final  illness  tender  Southern  hands  smoothed 
his  way  into  the  hereafter.  Mrs.  H.  P.  Hepburn  of 
Louisville,  once  of  San  Francisco,  was  present  when 
the  curtain  rang  down  on  "Rand."  He  raised  his 
feeble  head  and  said:  "I'se  'gwan  to  meet  ole  Marse 
Johnston,"  then  sunk  ])ack  on  the  rough  ])illo\v,  closed 
his  eyes  and  died. 


44 


CHAPTER  VI. 

Perilous  Trip  Across  Mexico  and  V'oyage  on  Block- 
ade Runner  Enter  Into  Narrator's  Experiences 
ON  Visit  to  Jefferson  Davis. 

Soittlicnicrs  in  California  form  Plan  to  Intercept  Gold 
Shipments  on  Pacific  Mail  Liners  from  San  Francisco 
to   Capital. 

I  was  broken-hearted  at  the  turn  of  affairs  in  CaH- 
fornia.  Needless  to  say,  I  was  one  of  those  w^ho 
voted  "yes"  on  the  memorable  night  when  the  com- 
mittee disbanded.  The  actions  of  General  Sumner, 
which  were  needlessly  severe  and  autocratic,  tended 
to  make  the  tension  more  severe.  Just  for  some  idle 
expression  of  sympathy  for  the  South,  all  sorts  of 
really  inoffensive  people  were  clapped  into  Alcatraz 
and  subjected  to  indignity  and  loss.  President  Lin- 
coln later  on  realized  that  Sumner  was  only  making 
matters  worse  and  sent  General  Rice  to  relieve  him, 
who  at  once  adopted  a  policy  more  pacific  and  wise. 

But  this  is  no  part  of  the  story.  The  idea  of  inter- 
rupting the  gold  shipments  by  the  Pacific  Mail,  very 
essential  to  the  Government  at  Washington,  again 
took  form.  This  was  to  be  effected  by  seizure  on  the 
high  seas.  A  number  of  prominent  men  were  inter- 
ested and  I  was  requested  to  become  one.  I  had 
no  stomach  for  downright  piracy,  though  ready  for 
any    risk.      I    stipulated    that    I    must    first    receive    a 

45 


The  Great  Diamond  Hoax 

regular  commission  from  the  Confederate  Navy.  This 
being-  agreed  to,  the  sum  of  $250,000  was  subscribed, 
of  which  $50,000  was  mine. 

In  company  with  H.  T.  Templeton,  a  well-known 
Californian,  later  a  familiar  of  the  Crocker  family, 
we  traveled  by  steamer  to  Acapulco.  Mexico  was 
then  in  an  uproar  over  the  threatened  French  in- 
vasion. The  American  Consul,  a  son  of  John  A. 
Suter,  advised  us  that  it  was  little  short  of  madness 
to  cross  the  country  to  Mexico  City,  which  we  gave 
as  our  destination.  But  Templeton  was  brave  as  a 
lion  and  I  was  young,  reckless  and  confident  in  my 
luck.  Heavily  armed,  with  a  single  guide,  who,  by 
the  way,  fled  in  terror  at  the  first  sight  of  danger,  we 
set  out  on  a  venturesome  journey. 

That  trip  would  make  some  story  by  itself.  We 
had  several  pitched  battles  with  small  bands  of  "la- 
drones"  or  robbers.  Once  both  our  horses  were  shot 
from  under  us.  My  previously  acquired  knowledge 
of  Spanish  stood  us  in  good  stead  in  securing  fresh 
equipment,  knowledge  of  the  w'ay  and  sometimes  hos- 
pitality, and  shelter.  Finally,  after  great  hardships 
and  danger  we  reached  Mexico  City,  and  thence  pro- 
ceeded without  incident  to  Vera  Cruz,  which  was  a 
sort  of  rendezvous  for  blockade  runners.  Here  Tem- 
pleton and  I  parted  company  with  mutual  regrets. 
He  took  a  ship  for  New  York  and  returned  to  Cali- 
fornia. I  boarded  a  blockade  runner  and  during  a 
rainy  night  we  slipped  past  the  Federal  warships  into 
Charleston. 

I  had  no  difhculty  in  reaching  Ricliniond,  \'irginia, 

46 


Perilous  Trip  Across  Mexico 

the  Confederate  eapital.  It  was  a  vast,  hustliit<;", 
military  camp.  Troops  were  marchiiii;-  and  counter- 
marching', ofificers  on  horseback  dashing"  to  and  fro  on 
mysterious  missions  and  everywhere  the  atmos])here 
of  war. 

It  was  a  couple  of  days  before  I  saw  President 
Jefferson  Davis.  I  laid  my  plans  before  him  fully, 
to  liis  great  interest,  and  later  we  had  several  inter- 
views. He  did  not  come  to  a  swift  conclusion.  To 
my  way  of  thinking  at  the  time  he  was  over-delib- 
erate in  making  up  his  mind.  That  was  a  youth tul 
illusion.  I  think  of  him  now  as  a  very  great  man,  lack- 
ing only  one  thing — luck. 

He  fully  realized  the  importance  of  shutting  off 
the  great  gold  shipments  to  the  East  from  California. 
President  Davis  said  it  would  be  more  important 
than  many  victories  in  the  field.  At  the  same  time, 
he  saw  grave  difficulties  in  the  way.  He  did  not  be- 
lieve that  a  vessel  could  be  outfitted  for  the  purpose 
in  any  of  the  Pacific  ports  without  arousing  suspicion, 
disclosure  and  capture.  He  warned  me  that  my  asso- 
ciates and  myself  were  taking  an  awful  risk,  almost 
sure  to  result  in  ultimate  disaster.  Moreover,  he  was 
uncertain  whether  under  any  circumstances  the  enter- 
prise could  be  justified  under  international  law  and 
whether  the  proceeding  would  not  fall  under  the 
head  of  piracy,  against  which  he  resolutely  set  his 
face.  j 

All  these  questions  were  submitted  to  one  of  his 
Cabinet  officers,  Judah  P.  P.enjamin.  Mr.  Benjamin 
was  of  Jewish   ancestry   and    one   of   the   al)lest   men 

47 


The  Great  Diamond  Hoax 

who  guided  the  way  of  the  Confederacy.  After  the 
general  breakup,  he  escaped  to  England,  became  a 
leader  of  the  bar  of  London,  counsel  to  the  Queen 
and  won  the  highest  honors  of  his  profession  before 
he  died.  This  distinguished  gentleman  examined  with 
grt'al  care  ihc  (piestions  invoh'ed.  particularly  on  the 
]>iracy  point,  and  he  gave  an  opinion  that  it  would  be 
entirely  within  the  scope  of  international  law  to 
ccpiii)  and  sail  a  \essel  out  of  any  port  of  the  United 
States  provided  no  overt  act  against  commerce  were 
committed  before  a  foreign  port  was  reached,  letters 
of  marque  cxhil)ite(l  there  and  the  ()])en  ])uri)()se  of  those 
in  command  declared.  So  for  what  followed  1  had  at 
least  the  advice  of  eminent  counsel  and  I  still  believe 
that  the  advice  was  absolutely  sound. 

In  due  course  of  time  I  received  a  commission  as  a 
captain  in  the  Confederate  Navy.  T  had  never  been 
on  a  man-of-war  in  my  life,  but  that  made  no  dif- 
ference. A  fresh  water  naval  hero  may  be  as  good  as 
the  salt  water  kind.  Also  I  received  letters  of 
marque  in  blank,  the  names  to  be  filled  in  when  the 
vessel  reached  a  foreign  port.  Besides  that  I  was 
intrusted  with  C]uite  a  bundle  of  mail,  addressed  to 
leading  Southerners  in  California  and  doubtless  of  a 
highly   compromising   character. 

This  literary  consignment  nearly  got  not  only  my- 
self l)ut  many  other  people  into  a  peck  of  trouble, 
which  1  might  as  well  tell  of  now,  although  it  is 
somewhat  ahead  of  my  story.  Returning  to  Califor- 
nia, liking  not  the  route  through  Mexico,  I  had  the 
Idiickade     runner    land     me    at    Aspinwall,     wliere     I 

48 


JEFFERSON    DAVIS 

The   able   and    illustrious   leader 

of   the    Lost    Cause 


Perilous  Trip  Across  Mexico 

joined  the  passengers  of  a  Pacific  Mail  liner  and 
embarked  at  Panama  for  the  run  north.  As  we  were 
approaching-  San  Francisco  I  became  uneasy  about 
my  documents,  fearing  that  enougdi  about  my  move- 
ments might  be  known  to  cause  a  close  personal 
search. 

On  board  the  steamer  was  a  lady  long  famous  in 
California,  Mrs.  Charles  S.  Fairfax.  Her  husband 
was  the  lineal  Lord  Fairfax  of  the  British  peerage. 
She  was  a  niece  of  John  C.  Calhoun,  a  woman  of 
great  beauty,  wit  and  resourcefulness  and  an  intense 
Southern  sympathizer.  We  became  rather  confiden- 
tial on  the  way  up  and  I  told  her  about  the  package 
and  my  fears. 

"Why,  what  stupid  fools  men  are,  anyhow,"  she 
laughed,  "give  that  package  to  me  and  set  your  mind 
at  rest."  The  suggestion  looked  good,  for,  of  course, 
I  could  assume  responsibility  if  the  documents  were 
found.  That  night  Airs.  Fairfax  left  her  door  just  a 
bit  ajar  and  as  I  passed  it  something  was  slipped  to 
her.     No  one  saw  the  transfer. 

When  we  reached  San  Francisco  what  I  feared 
came  true.  Not  alone  my  luggage,  but  my  person 
were  subjected  to  a  search  that  hardly  overlooked  my 
soul.  While  I  was  in  the  hands  of  the  minions  of  the 
law,  who  seemed  sadly  disappointed  over  their  fruit- 
less quest,  Mrs.  Fairfax  swept  by  in  her  stately  way ; 
all  the  same  I  seemed  to  catch  a  twinkle  of  humor 
in  her  eye. 

Two  days  later,  the  lady  handed  me  the  package. 
The  seals  were  broken,  but  the  contents  intact.     "You 

51 


The  Great  Diamond  Hoax 

gave  me  a  lot  of  bother,"  said  the  lady,  "I  had  to  sit 
up  all  ni^^ht  sewing  these  wretched  papers  in  my 
dress.  W'liat  was  worse  still.  I  never  dared  to  change  it. 
Just  imagine  what  the  other  women  thought  of  me." 

I  passed  the  letters  around  to  various  leading  law- 
yers, bankers,  financiers,  and  so  on.  Without  men- 
tioning any  names  I  told  them  how  near  they  came  to 
falling  into  Federal  hands.  Many  a  cheek  paled  and 
jaw  dropped  as  they  heard  the  story. 

We  have  been  told  much  of  what  women  did  for 
the  North,  very  little  of  what  the  women  did  for  the 
South.  That  is  a  noble  and  inspiring  story  that  re- 
mains to  be  told. 

But  to  return  to  Richmond.  The  Confederate 
cause  seemed  at  its  zenith.  Everywhere  w^as  abound- 
ing confidence  in  the  final  result.  And  now  came  a 
whisper  that  a  great  battle  would  soon  be  fought  that 
ought  to  be  decisive.  I  was  eager  to  see  something 
of  the  war  game  and  with  letters  from  the  Secretary 
of  W'ar,  hurried  westward,  arriving  at  Corinth,  Miss., 
on  April  4.  1862.  Here  a  small  Confederate  army 
was  asseml)led  under  the  same  Albert  Sidney  John- 
ston, not  exceeding  5,000  men.  Nine  miles  away. 
General  Grant  was  encamped  at  Shiloh  with  35,000 
men,  confidently  awaiting  the  arrixal  of  General  lUiell 
with  30,000  more,  to  begin  the  invasion  of  the  South. 

At  the  risk  of  criticism  by  experts  I  am  going  to 
tell  briefly  what  a  great,  old-fashioned  battle  seemed 
like  to  a  raw  looker-on. 


52 


JUDAH    P.    BENJAMIN 

One  of   the   ablest   Confederate 

Statesmen 


CHAPTER  VII. 

The  Great  Battle  of  Siiiloh  and  the  Soutii's  Ir- 
reparable Loss  IN  THE  Death  of  General  John- 
ston. 

War,  fifty  years  ago,  was  bad  enough,  but  it  wasn't 
the  plain,  cold-blooded  deviltry  that  it  is  to-day.  When 
men  met  face  to  face  and  leaders  led,  in  fact  as  well  as 
theory,  I  can  understand  the  inspiration,  the  enthusiasm, 
the  wild  love  of  glory,  that  invited  the  best  blood  to  a 
military  life.  But  now,  when  victories  are  to  be  won  by 
pressing  buttons,  switching  on  or  off  electric  currents 
or  dropping  bombs  from  the  sky  on  the  heads  of  help- 
less women  and  children,  while  it  may  attract  those  of 
a  mechanical  turn  of  mind,  it  has  ceased  to  be  a  busi- 
ness that  should  interest  a  gentleman. 

]\Iy  recollection  is  of  the  old  fighting  days.  I  said 
that  when  I  arrived  in  Corinth  on  April  4,  1862,  not 
more  than  five  thousand  men  were  assembled  there.  But 
all  that  night  and  the  next  day  troop  trains  were  un- 
loading enormous  reinforcements  and  some  were  arriv- 
ing by  forced  marches  on  foot.  By  the  night  of  April 
5,  between  twenty-five  and  thirty  thousand  soldiers  were 
in  camp,  the  flower  of  the  fighting  army  of  the  South. 
General  Albert  Sidney  Johnston,  with  his  heroic  figure 
and  magnetic  presence,  roused  tlie  men  to  a  height  of 
martial  exultation  very  hard  to  describe.  Everyone 
knew  that  a  great  battle  was  impending.     Alost  of  them 

55 


The  Great  Diamond  Hoax 

guessed  that  the  morrow  would  be  the  day.  But  they 
hardly  seemed  able  to  wait.  They  were  like  war  dogs 
tugging  at  the  leash,  confident  in  themselves,  confident 
in  their  cause.  One  would  have  thought  they  were 
bound  for  a  holiday  excursion  instead  of  a  death  grap- 
ple from  wliich  many  would  never  emerge. 

Very  much  to  my  disappointment,  I  was  assigned  to 
the  stafif  of  General  Beauregard,  second  in  command.  I 
had  hoped  to  be  with  General  Johnston,  where  the  fight- 
ing would  be  the  fiercest.     Nevertheless,  I  had  enough. 

The  troops  retired  at  an  early  hour  on  the  night  of 
April  5.  But  in  the  darkness  flitted  shadows  of  alert 
men,  making  busy  preparations  for  a  great  event.  At 
two  o'clock  in  the  morning,  the  troops  were  roused  from 
their  sleep,  had  hasty  refreshment  in  the  darkness,  and 
then  fell  in,  company  after  company,  like  so  much  clock 
work,  and  the  march  to  Pittsburg  Landing,  or  Shiloh, 
nine  miles  away,  began.  The  infantry  was  well  in  front, 
separated  by  perhaps  half  a  mile  from  the  artillery  and 
more  noisy  equipment. 

The  nature  of  the  country  was  admirable  for  a  secret 
movement.  It  was  well  wooded,  with  alnmdant  cover 
to  screen  our  presence,  and  it  seemed  almost  uncanny 
how  the  thousands  of  men  marched  forward  with  scarce 
noise  enough  to  stir  the  early  morning  air.  Not  a  word 
was    spoken. 

It  was  just  daylight  when  we  drove  in  the  Federal 
pickets.  Before  us  lav  the  armv  of  General  Grant.  Tl 
seems  to  me  that  it  was  not  more  than  two  Inmdrcd 
yards  awav.  Breakfast  was  being  cooked,  tlie  officers 
and  iiu-n  lolalK'  olT  flicir  guard.      Xotliing  in   tlie  nature 

56 


[ 

0 

MRS.    CHAS.    S.    FAIRFAX 

Wife   of   Lord    Fairfax,    niece   of 

John    C.    Calhoun 

Reproduced    from    an 
Id  photograph.] 

The  Great  Battle  of  Shiloh 

of  surprise  could  be  imagined  more  terriljlc  and  com- 
plete. Quick  commands  were  given,  there  was  a  rattle 
of  musketry,  the  "rebel"  yell  rang  out — a  sound  that 
might  well  start  the  resurrection  of  the  dead — and  the 
next  instant  I  saw  what  appeared  a  long  line  of  racing 
apparitions  in  gray,  with  fixed  bayonets,  clear  the  inter- 
vening space  and  fall  like  a  cloudburst  on  the  men  in 
blue. 

Nothing  saved  the  army  of  General  Grant  from  utter 
destruction  but  the  presence  of  several  gunboats  in  the 
Tennessee  river.  These  were  splendidly  handled,  and 
the  fire  was  deadly  and  precise.  It  gave  the  Union 
forces  an  opportunity  to  recover  somewhat  and  put  up 
a  gallant  fight.  Field  artillery  was  concentrated  on  the 
gunboats.  Sharpshooters  climbed  into  nearby  trees  and 
picked  off  the  gunners  at  their  posts.  The  fire  became 
less  frequent,  less  precise. 

Anyone  could  see  the  line  of  General  Johnston's  strat- 
egy. Grant's  army  was  encamped  on  rising  ground  be- 
yond the  Tennessee.  Behind  it  the  ground  fell  off  rather 
abruptly  to  a  narrow  plain  along  the  river  bank,  beyond 
which  was  no  retreat.  The  object  of  the  attack  w'as  to 
force  the  Federal  line  to  the  river  bank  and  then  drive 
in  the  wings  until  the  Union  army  became  a  huddled 
mass  on  the  low  ground  where  it  could  not  fight  effect- 
ively, and  be  at  the  mercy  of  artillery  fire.  Then  it 
must  either  surrender  or  be  wiped  out.  The  first  step 
was  accomplished  by  the  initial  bayonet  charge.  The 
second  required  more  time. 

The  battle  raged  into  the  afternoon.  The  field  was 
covered  with  dead  and  dying,  but  the  strategy  of  Gen- 

59 


The  Great  Diamond  Hoax 

eral  Johnston  was  rapidly  bearing  fruit.  The  gunboats 
were  ahnost  silenced,  the  I'ederal  columns  showed  ajj- 
parent  signs  of  disintegration.  Another  hour  wouhl 
have  seen  a  total  rout.  General  Johnston  had  been 
everywhere,  the  directing  genius,  exposing  himself  to 
needless  dangers.  Just  in  the  moment  of  triumph,  he 
fell  headlong  from  his  horse. 

It  seemed  as  if  the  news  of  this  irreparable  loss 
spread  through  the  army  like  wildfire  and  caused,  not  a 
demoralization,  but  a  general  pause.  Beauregard  took 
command,  evidently  under  a  great  mental  strain.  To  the 
surprise  f)f  many,  he  gave  orders  to  retire.  I  heard 
him  sa\' :  "To-morrow  we  will  be  across  the  Tennessee 
river,  or  in  hell." 

He  had  another  guess.  Early  the  next  morning  Gen- 
eral lUiell  crossed  the  Tennessee  with  thirl}-five  thousand 
fresh  troops,  and  all  day  we  were  fighting  our  way  back 
to  the  strong  position  at  Corinth.  The  great  opportu- 
nity was  lost. 

Thus  I  saw  the  bloodiest  battle  of  the  war  and  T 
think  the  most  decisive — far  more  so  than  Gettysburg. 
Had  Johnston  overwhelmed  Grant  at  Shiloh,  met  Buell 
with  an  arm\-  lluslieil  w  iili  victorw  with  no  gunboats 
to  contend  with,  there  might  have  been  another  tale  to 
tell.  With  Tennessee  liberated,  Kentucky  and  Missouri 
might  have  joined  the  Confederate  cause  and  influenced 
the  final  outcome  profoundly.  When  I  look  back  at  the 
long  series  of  mishaps  and  unforeseen  misfortunes  that 
seemed  lo  haunt  the  Lost  Cause,  I  cannot  but  conclude 
that  God's  will  was  there.     After  many  years  of  bitter 

60 


CHARLES    S.    FAIRFAX 

Last    Lord    Fairfax    in    direct 

male   descent 


[Reproduced   from   an 
old  photograph.] 


The  Great  Battle  of  Shiloh 

recollections,  \vc  arc  all  of  one  mind — that  the  ontconie 
was  best  for  the  country,  and  best  of  all  for  the  South. 

I  saw  General  Johnston's  body  on  the  field,  where  he 
fell.  The  wound  that  caused  his  death  was  of  a  trifling 
nature.  A  rifle  ball  had  cut  an  artery  in  his  leg.  A 
surgeon  with  a  tourniciuet  could  have  stopped  the 
hemorrhage.  lUit  he  never  sought  assistance.  He  stood 
by  his  post  like  a  true  soldier,  and  slowly  bled  to  death. 

History  has  classed  Johnston  as  a  great  military 
genius.  Years  after,  the  Government  of  the  United 
States  erected  a  shaft  with  a  suitable  inscription  on  the 
spot  where  he  fell  at  Shiloh.  His  tomb,  with  a  no])le 
equestrian  statue,  is  in  New  Orleans.  Most  of  his  direct 
descendants  live  in  California,  the  State  that  he  saved 
from  the  desolation  of  war. 

Concerning  the  battle  of  Shiloh,  I  have  better  testi- 
mony than  my  own.  A  score  of  years  later,  I  met  Gen- 
eral Grant  in  New  York.  Out  of  an  acquaintance,  an 
intimate  friendship  developed.  During  his  first  financial 
embarrassment,  of  which  the  world  never  knew,  I 
piloted  him  to  a  safe  haven.  Grant's  genius  was  entirely 
one-sided.  In  matters  of  business,  he  was  the  veriest 
child.  He  had  tied  himself  up  in  Wall  Street  ventures 
and  was  facing  ruin  when  he  sought  my  advice.  I  took 
his  account  to  my  brokers,  Henry  Clews  &  Company, 
where  I  had  a  balance  of  nearly  two  millions  to  my 
credit,  and,  by  careful  nursing,  brought  him  out.  not 
only  even,  but  ahead.  IMie  General  and  T  often  spoke 
of  Shiloh,  and  he  admitted,  with  a  soldier's  frankness, 
that  only  Johnston's  death  saved  his  command.     He  also 

63 


The  Great  Diamond  Hoax 

added  that  he  learned  a  lesson  in  war  that  fateful  day, 
the  most  important  in  his  long  experience. 

In  this  era  of  good-will  and  reconciliation,  when  the 
old  hoys  in  hhie  and  gray  are  meeting  in  comradeship 
on  the  scenes  of  their  former  struggle,  why  cannot 
someone  write  a  trustworthy  and  impartial  history  of 
the  great  drama — the  greatest  of  our  national  life — 
which  our  boys  and  girls  may  read  and  learn  the  truth? 
Tlie  text-books  of  our  schools  are  still  dcformcfl  by  a 
spirit  of  intolerance  and  prejudice,  most  unfortunate  and 
misleading  in  an  age  that  has  happily  outlived  the  bit- 
terness that  divided  us  in  the  past. 


U.    S.    monument    and    marker    on    battlefield    of 

Shiloh,     indicating    spot    where    General 

Johnston    fell. 


64 


CHAPTER  VIII. 

Nephew  of  Celebrated  English  Leader  Takes  Hand 
IN  Conspiracy,  and  Also  Figures  in  Amusing 
Near-Duel. 

I  (lid  not  return  to  Calif(jrnia  after  my  visit  to  the 
seat  of  war  until  late  in  the  month  of  July,  1862. 
Everything"  seemed  in  regular  shape  for  outfitting-  a  pri- 
vateer. But  again  the  Comstock  Lode  interfered.  Spec- 
ulation was  fast  and  furious.  Of  those  who  subscribed 
to  the  fund  of  $250,000  to  carry  on  the  enterprise  only 
two  remained  steadfast,  Mr.  Ridgley  Greathouse  and 
myself.  Greathouse  was  connected  with  some  of  the 
well-known  families  of  the  South  and  of  California. 
He  was  a  man  of  unusual  courage  and  determination. 
We  laid  our  heads  together  and  decided  to  go  ahead 
alone. 

At  this  point  we  gained  an  unexpected  ally.  As  he 
cuts  quite  a  figure  in  this  story,  especially  in  the  great 
diamond  hoax,  I  might  as  well  explain  the  strange  way 
in  which  we  met. 

Mr.  Alfred  Rubery  was  a  young  English  gentleman 
of  fortune  and  culture,  with  tlie  roving  disposition  and 
love  of  venture  that  was  i^irt  of  the  make  of  high- 
strung-  Englishmen  of  his  da>'.  Traveling  in  the  South 
just  before  the  war,  he  had  ac(|uired  an  admiration  for 
its  aristocracy.  Thus  ha]ipene(l  something  that  seemed 
paradoxical.     Rubery  was  the  favorite  nephew  of  John 

65 


The  Great  Dianioiui  Hoax 

iirii^'ht.  the  ^rcal  J'jij^lisli  statesman  aiul  i)ul)lici>t.  It 
was  due  to  his  inHuenee  and  leadersliip  among  the  lahor- 
ing  masses  that  England  declined  to  interfere  in  favor 
of  the  Confederate  States  when  its  industries  were 
ruined  and  the  industrial  classes  starving,  because  the 
cotton  staples  from  the  Soutli.  on  which  they  depended, 
were  suddenly  cut  off.  Thus,  while  John  Bright,  across 
the  Atlantic,  was  resolutely  upholding  the  North,  his 
dear  ne|)hew  in  San  Francisco  was  openly  expressly 
sympathy   for  the  South. 

Sectional  feeling  at  that  |)eriod  was  so  intense  that 
the  slightest  word  brought  on  a  (piarrel.  One  evening 
Rubery  met  a  young  officer.  Lieutenant  Tompkins,  sta- 
tioned at  Fort  Point,  scion  of  a  prominent  family  of 
New  York.  Somehow  the  subject  of  the  war  was 
broached.  High  words  followed,  and  Tompkins  made 
a  remark  that  touched  Rubery's  honor.  The  latter  sim- 
ply said,  ''You  will  hear  from  me.  sir."  and  left  the 
room. 

The  code  duello  was  still  in  full  force.  Though  a 
cause  of  instant  dismissal  from  the  army,  no  officer 
would  hesitate  for  a  moment  to  refuse  satisfaction  to  a 
gentleman  who  considered  himself  aggrieved.  Rubery 
sought  a  friend  of  mine  and  asked  him  to  bear  his  chal- 
lenge. I  le  was  on  the  point  of  leaving  for  Oregon  to 
attend  to  some  of  my  business.  For  that  reason  he 
turned  the  young  Englishman  over  to  me. 

Now,  when  a  man  chose  his  second,  he  placed  his 
life  entirely  in  his  hands.  It  became  at  once  my  duty 
to  examine  certain  details.  The  challenged  party  had 
the  right  to  name  the   wea])ons.  and    I    knew   Tompkins 

66 


ALFRED    RUBERY 

Nephew   of   John    Bright,   the   great 

British    publicist 


[Reproduced  from   an 
old  photograph.] 


Takes  Hand  in  Conspiracy 

to  be  an  expert  swordsman.  I  asked  my  man  about 
his  saber  experience.  He  admitted  that  he  had  some 
knowledge  of  carving"  ham,  but  as  to  carving  anything 
else  he  was  as  ignorant  as  a  child.  I  tried  him  at  pistol 
practice  and  found  that,  with  extra  good  luck,  at  ten 
paces  he  could  hit  a  barn. 

To  go  into  a  duel  under  such  conditions  was  down- 
right madness.  I  told  Rubery  that  I  could  not  suffer 
him  to  be  a  chopping-block  for  a  Yankee  or  to  be  coolly 
potted  while  he  was  shooting  at  the  sun.  I  advised 
him  that  he  must  take  time  to  practice  with  swords  and 
pistols.  But  the  Englishman  would  not  be  denied.  I 
never  saw  a  man  so  determined.  He  said  he  would 
rather  die  a  thousand  times  than  survive  an  unresented 
])ul)lic  insult.  Having  no  alternative,  I  carried  Rubery's 
challenge  to  Tompkins  at  Fort  Point. 

Lieutenant  Tompkins  referred  me  to  his  friend,  Qnar- 
termaster  Judson,  whom  I  met  without  delay.  I  found 
he  had  little  stomach  for  the  duel,  not  because  he  or  his 
principal  were  afraid,  but  because  they  dreaded  dismissal 
from  the  service.  He  admitted  that  his  principal  was 
in  the  wrong  and  asked  if  there  were  any  reasonable 
terms  to  adjust  the  difference.  I  told  him  I  was  in- 
structed by  my  principal  to  accept  nothing  but  a  written 
retraction  of  the  offensive  language.  "That  is  out  of 
the  question,"  said  Judson.  "We  are  wasting  time.  Let 
us  proceed  to  details." 

"Proceeding  to  details"  was  quite  a  formal  function 
in  the  code.  Arrangements  for  the  slaughter  of  a 
couple  of  human  beings  were  always  discussed  over  a 
bottle    of    wine,    in    a    spirit    of    friendly    benevolence. 

69 


The  Great  Diamond  Hoax 

7'Hlson  produced  the  refreshments,  filled  my  glass, 
handed  it  to  me  standing,  left  his  own  unfilled  and  sat 
down. 

Now,  in  Southwestern  Kentucky,  where  I  was  raised, 
gentlemen  always  drank  together.  To  offer  wine  or 
corn  juice  to  an  equal  and  not  partake  yourself  was  an 
almost  unjiardonable  afi^ront.  You  might  do  that  with- 
out ofifense  to  an  humble  dependent,  but  not  to  one  of 
the  same  social   rank. 

I  had  determined  that  the  duel  sliould  not  lake  place 
and  was  watching  for  any  chance  to  s])ar  for  time. 
This  seemed  to  offer  an  "opening."  Of  course,  Jud- 
son  had  not  the  most  remote  idea  of  being  discour- 
teous. l)Ut  I  assumed  to  think  otherwise.  I  looked  as 
indignant  as  possible,  dashed  the  glass  on  the  floor, 
slapped  my  hat  on  my  head  and  left  the  apartment  be- 
fore the  astonished  quartermaster  had  time  to  catch  his 
breath.  A  few  hours  later  my  second.  Captain  Fluson, 
a  famous  duelist,   waited  on  Judsou   with  my  challenge. 

T  hope  no  one  will  imagine  I  am  bragging.  I  took 
not  the  slightest  chance  in  sending  the  challenge  and 
knew  it  very  well.  No  man  was  coiupellcd  to  acce]:)t 
a  challenge  without  a  full  knowledge  of  the  nature  of 
his  off'ense.  If  a  jjcrson  wanted  to  fight  you  just  for 
his  own  anuisement  or  because  he  disapproved  of  the  cut 
of  your  coat,  no  one  was  expected  to  humor  him,  and  a 
man  of  honor  could  ])roperly  refuse  to  consider  a  chal- 
lenge based  on  trivial  grounds  or  even  kick  the  bearer 
out  of  doors.  As  soon  as  my  second  presented  him- 
self to  Judson,  just  as  I  expected,  he  asked  to  be 
informed    in    what    way    he    had   given    ofifense    to    Mr. 

70 


Takes  Hand   in  Conspiracy 

I  larpendiiiL;.  My  second  (.■.\])I:unc(l  the  deadly  iialu"'^ 
of  tlie  one-sided  invitation  to  drink,  accordini;"  to  the 
usai^es  of  Southwestern  Kentucky,  whereat  the  (|uarter- 
niaster  lau.^hed  and  said  he  was  io-norant  of  any  such 
custom  ;  that  lie  liad  never  liad  the  remotest  intention 
of  heing-  discourteous  and  asked  that  this  exi)lanation  be 
given  me  before  going  further. 

Of  course,  I  had  to  appear  immensely  gratified.  I 
wrote  Tudson,  expressing-  my  entire  satisfaction,  apolo- 
gized for  my  own  hasty  conclusion,  and  asked  him  t.) 
dinner.  We  had  a  jolly  sort  of  time  and  over  lilack 
cotTee  we  discussed  the  proposed  Rubery-Tompkins 
duel.  Both  agreed  it  was  a  shame  to  see  two  fine 
young-  fellows  fill  each  other  with  lead  and  decided  to 
co-operate  to  prevent  it.  We  managed  to  bring-  the 
principals  together  and  after  a  lot  of  diplomacy  on  all 
sides  Tompkins  agreed  to  a  written  retraction  of  the 
insulting-  language,  Rubery  promising  that  it  should 
never  be  exhibited  unless  he  were  charged  with  cow- 
ardice as  a  result  of  the  billiard-hall  incident. 

Everything  terminated  in  a  dinner  party  and  the 
incident  was  closed. 

Rubery  and  I,  thus  strangely  brought  together,  be- 
came inseparable.  We  were  nearly  of  an  age,  both 
crazy  for  adventure,  both  devoted  to  the  South.  It 
was  not,  therefore,  strange  that  I  confided  to  him  all 
my  plans  of  outfitting  a  privateer.  When  he  learned 
the  details  he  became  almost  idiotic  with  delight. 
"Now,  we're  getting  somewhere,"  he  cried.  "Let  me 
be  your  associate  and  count   me   in   to  the   limit." 

71 


The  Great  Diamond  Hoax 

That  is  how  the  nephew  of  John  Bright  hecame  as- 
sociated with  Greathouse  and  myself  in  an  efifort  to 
destroy  the  commerce  of  the  I'acific  Coast  and  how  he 
came  to  loom  largely  in  what  was  known  to  history  as 
the  "Chapman  piracy  case." 


11 


CHAI'Tl'-K    IX. 

Plan  to  Capture  Gold  Ships  Develops,  But  Trouble 
Follows  Engagement  of  Villainous-Looking  Pilot. 

The  three  of  us — Greathouse,  Ruhery  and  myself — 
now  worked  in  unison.  My  first  intention  was  to  out- 
fit in  British  Cohimliia,  l)ut  an  agent  stationed  at  \"an- 
couver  was  unable  to  find  anything  fit  for  our  purpose. 
We  negotiated  for  the  purchase  of  the  steamer  Otter, 
owned  in  Oregon,  but  on  a  trial  trip  she  failed  to 
develop  a  speed  much  greater  than  that  of  a  rowobat — 
not  enough  either  to  fight  or  run  away. 

While  we  were  fretting  over  the  delay  a  small  deep- 
water  vessel  came  into  port,  after  a  record-breaking- 
voyage  from  New  York.  The  ship  was  called  plain 
"Chapman."  Historians  have  seen  fit  to  name  it  the 
"J.  AT.  Chapman.''  for  what  reason  I  am  not  aware. 
Probably  it  was  a  case  of  what  literary  folk  are  pleased 
to  call  "poetic  license."  At  any  rate,  we  considered  it 
a  serviceable  craft,  in  default  of  a  steam  vessel.  We 
purchased  the  Chapman  from  her  owners  at  a  reason- 
able price,  as  it  was  winter  and  an  outbound  cargo  was 
not  obtainable  at  that  season  of  the  year. 

Our  plans  might  as  well  be  explained  fully  here.  We 
proposed  to  sail  the  Chapman  to  some  islands  off  the 
coast  of  Mexico,  transform  her  into  a  fighting  craft, 
proceed  to  Manzanillo.  exhibit  our  letters  of  marque 
and   my  captain's   commission    in    the   Confederate   navy 


The  Great  Diamond  Hoax 

and  then  lie  in  wail  tor  the  first  Pacific  Mail  liner 
that  entered  the  harl)()r,  ca])tnre  her — peacefully  if 
possihle,  forcihly  if  we  must.  All  of  this  was  in  line 
with  instructions.  Then  we  proposed  to  equip  the 
captured  liner  as  a  privateer  and  fif^ured  to  interce])t 
two  more  eastl)oun(l  Pacific  Mail  steamers  hefore  the 
world  knew  what  was  happeninj;",  in  those  days  of 
slow-traveling"  news.  After  that  we  jiroposed  to  let 
events  very  much  take  their  own  course.  It  was  a 
wild,  desperate  undertaking  at  the  best,  but  we  were 
all  of  an  age  that  takes  little  stock  of  risks. 

Having"  our  ship,  other  details  followed  rapidly 
enough.  ^^\■  purchased  two  cannons  throwing"  a  12- 
pound  shot.  This  was  arranged  by  a  Mexican  friend 
of  mine,  acting  through  a  well-known  business  firm, 
which  was  entirely  ignorant  of  the  nature  of  the  trans- 
action. In  the  same  way,  we  boug"ht  shells  and  solid 
shot  and  a  large  quantitv  of  ammunition.  In  those 
days  of  adventure  it  was  no  uncommon  matter  for 
corporations  or  even  private  persons  to  purchase  arm- 
ament on  a  considerable  scale,  without  comment.  Often 
remote  investments  had  to  be  i)rotected  n<>t  onl\'  with 
armed  nien  but  also  w  ith  a  sliow  of  artillery.  (  )ur 
]\Texican  friend  merely  had  to  sa\'  that  he  needed  tlie 
niilitary  su])])lies  to  guard  a  mining  i)roi)erty  in  his 
own  countr\-.  As  a  matter  of  fact,  he  never  knew 
what  tlie  war  mate-rial  was  intended  for — just  took  it 
for  granted  that  he  was  doing  something  in  (lie  line 
of  accommodation. 

Also  we  bought  a  large  assortment  of  small  arms, 
rifles,   revolvers  and   cutlasses.     Ever\thing  was  heavily 

74 


Plan  to  Capture  Gold  Ships 

hoxed  and  marked  "machinery."  W'e  laid  in.  also,  to 
avoid  sus])icion,  a  small  line  of  general  ,^-oods  of  a  kind 
salable  in  a  Mexican  ])nv[.  and  an  extra  sni)|)l\-  of 
provisions. 

We  engai;"ed  an  ordinary  crew  of  able  seamen  and 
without  much  difficidty  selected  twenty  picked  men — 
all  from  the  South,  of  ])roved  and  desperate  courai^e. 
These  were  to  constitute  our  workiui^;'  force.  They 
were  not  known  to  each  other,  did  not  even  know  the 
nature  of  the  service — further  than  that  it  meant  fight- 
ing" and  ]ilenty  of  it — somewhere  in   Mexico. 

All  our  plans  were  perfected.  It  only  remained  to 
secure  a  navigator  who  could  be  implicitlv  trusted. 
Men  of  the  South  did  not  have  nmch  practical  exjjeri- 
ence  in  seamanship.  Several  of  our  confidential  friends 
scoured  the  town  for  a  suitable  person  for  this  all- 
important   po-st. 

Finally  a  man  was  brought  to  me  by  the  name  of 
Wm.  Law.  guaranteed  to  be  a  competent  navigator 
familiar  with  the  Mexican  coast  and  a  Southern  svmi)a- 
thizer.  He  was  the  possessor  of  a  sinister,  villainous 
mug,  looked  capable  of  any  crime  and  all  in  all  was 
the  most  repidsive  reptile  in  appearance  that  T  ever  set 
eyes  on.  From  the  moment  T  saw  him,  I  was  filled 
with  distrust.  After  a  short  general  conversation  T 
dismissed  him  and  told  his  vouchers  that  T  coidd  put 
no  faith  in  such  an  ill-omened  looking  character.  I'.ul 
time  was  pressing.  No  one  else  showed  up  and  after 
further  guaranties,  Greathouse.  Rubery  and  m}self  saw- 
Law  again  and  frankly  gave  him  a  general  outline  of  our 
plans.       He    accepted    the    responsibility    with    a    well- 


The  Great  Diamond  Hoax 

feigned  eagerness ;  his  tough-looking  face  seemed 
hghted  with  a  sort  of  demoniac  exultation.  There  was 
still  another  who  shared  our  confidence  to  some  extent, 
Libby,  the  sailing  master  of  the  Chapman. 

Everything  was  now  ready  to  launch  the  enterprise. 
Our  clearance  papers  were  secured  from  the  custom- 
house with  a  readiness  that  might  have  suggested  a 
suspicion  to  more  alert  minds.  The  "Chapman"  was 
duly  certified  to  sail  for  ]\Ianzanillo  with  a  cargo  of 
machinery  and  mixed  merchandise. 

It  was  on  the  night  of  March  14.  Greathouse  and 
Law  were  to  be  on  board  at  ten  o'clock.  Rubery  and 
I  stationed  ourselves  in  a  dark  alley  behind  the  old 
American  Exchange  Hotel.  One  by  one,  our  fighting 
men  assembled  silently,  by  prearrangement.  The  night 
was  dark,  the  sky  overcast.  We  divided  into  three 
squads  to  avoid  attention,  slipped  through  the  dimly 
lighted  streets,  past  roaring  saloons  and  sailor  boarding 
houses  and  reached  an  unfrequented  part  of  the  water 
front   unnoticed,   where  the  privateer  was  moored. 

Everything  thus  far  had  gone  so  smoothly  that  Ru- 
bery and  I  were  exultant.  The  wind,  too.  was  pro- 
pitious. \\'e  figured  to  sail  without  delay,  pass  Fort 
Point  in  the  dark  and  be  beyond  the  horizon  before  the 
morning  broke.  We  scrambled  aboard  the  Cliapman. 
Greathouse  was  pacing  the  deck  in  agitation.  Law 
was  not   there. 

I  experienced  a  sliock  such  as  a  man  receives  when 
a  bucket  of  ice  water  is  em])ticd  on  him  in  his  sleep. 
The  suggestion  of  treachery  could  not  be  avoided.  We 
cast  loose  from  the  wharf  and  anchored  in  the  stream. 

76 


Plan  to  Capture  Gold  Ships 

But   we  were  helpless.     We  could  not  sail   without   our 
navigator.     We  had  nothing-  to  do  hut  wait. 

We  scanned  the  hay  for  an  approaching-  hcjat,  but  the 
dark  waters  answered  not.  At  two  o'clock  we  turned 
in  for  a  nmch  needed  rest.  We  left  a  trusty  man  as 
a  lookout  with  orders  to  waken  us  at  five  o'clock  if 
nothing  happened  before.  We  still  had  a  ling'ering 
hope  that  Law  might  appear  in  season  to  carry  out  our 
plans.  And  soon,  as  the  hours  glided  by,  the  Chapman 
rocked  us  to  sleep. 


n 


CHAPTER  X. 

We  Wake  to  l-ixv  Warship  Near  axd  IJoat  Filled 
With  Police  Ai'proachixc. 

Somebody  else  slumbered  on  board  ibe  Chairman  that 
night  besides  the  men  below.  Morpheus  evidently  got 
a  strangle-hold  on  our  vigilant  sentinel,  from  what  fol- 
lowed. I  was  wakened  by  a  shake  and  a  startled  cry 
from  the  lookout.     I  sprang  hastily  to  the  deck. 

It  was  broad  daylight.  A  couple  of  hundred  yards 
away  I  looked  into  the  trained  guns  of  the  U.  S.  war- 
ship Cyane.  Several  boatloads  of  officers  and  marines 
were  just  starting  from  her  in  our  direction.  A  hasty 
look  also  revealed  a  tugboat  making  for  us  from  the 
waterfront,  filled  with  San  Francisco  cops,  headed  by 
I.  \Y.  Lees. 

Of  course,  even  had  we  been  prepared,  resistance 
would  have  meant  suicide,  for  the  gunners  of  the  Cyane 
stood  waiting  orders  to  l)l()w  us  out  of  the  water.  I 
rushed  down  to  the  c.nbin.  jerked  l\u])ery  and  Great- 
house  from  their  ])unk.s  and  alter  a  brief  word  of  ex- 
])lanation  we  proceeded  to  destroy  as  many  incrimina- 
ting papers  as  possible.  \\'e  mafle  a  hasty  bonfire  on 
the  cabin  floor,  burned  a  number  of  documents  that 
might  not  have  looked  well  if  read  in  o])en  court,  tore 
into  little  bits  and  scattered  the  fragments  of  other 
documents  that  resisted  a  fiuick  fire  and  made  a  clean- 
u])   in   general.     Smoke  was  streaming  up  the  gangway 

78 


Wake  to  Find  Warship  Near 

wlicii  the  naval  otticcrs  and  i)()lirenien  swai'int'd  on 
board.  Someone  yelled.  "They've  fired  tlie  ])o\\iUr 
magazine."  This  made  a  diversion  and  gained  a  little 
more  time.  Nevertheless,  ont  of  the  destruction,  Ca])- 
tain  Lees  gathered  together  the  scraps  an<l  by  jjiecing 
them  together  and  guessing  at  the  missing  ])arts,  col- 
lected some  evidence  that  was  produced  against  us  in 
court   later  on. 

Greathouse,  Kubery,  Libby  and  myself  went  on  deck 
and  surrendered.  We  admitted  nothing,  contenting  our- 
selves with  saying  that  we  alone  were  res])onsiI)le  for 
the  ship  and  everything  on  board.  They  did  not  show 
the  least  surprise  as  they  searched  the  ship  and  opened 
boxes  containing  our  "knocked  down"  cannon  and 
stands  of  firearms.  They  saw  vast  quantities  of  pow- 
der, shells  and  ammunition  of  all  kinds  exposed  with 
as  much  indifiference  as  if  they  held  a  copy  of  the 
ship's  manifest,  which,  in  fact,  they  did  have  in  their 
possession,  through  the  treachery  of  Law.  If  anything 
further  were  needed  to  complete  the  knowledge  that 
he  had  betrayed  us.  it  was  furnished  by  an  unguarded 
remark  of  Captain  Lees. 

Our  twenty  fighting  men.  very  much  down  on  their 
luck,  were  found  in  a  foreward  compartiuent.  ( )n  our 
solemn  declaration  that  they  were  employed  onh'  for 
service  in  Mexico  none  were  prosecuted  and  final) \'  all 
were  discharged  with  a  "look  out"  in  the  future  ad- 
monition   from   the   officer   in   charge. 

Some  effort  was  made  to  sweat  the  four  of  us.  We 
were  cordially  invited  to  step  ii])  like  men  and  make  a 
clean    breast.      All    these    courtesies    were    i)olitelv    de- 

79 


The  Great  Diamond  Hoax 

clined.  A\'e  only  asked  to  be  advised  what  we  were 
chargetl  with,  and  the  answer  was  sufficiently  illumi- 
nating, "Why,  jjiracy,  of  course."  We  were  rather  care- 
lessly searched,  so  far  as  our  persons  were  concerned. 
I  was  allowed  to  retain  a  small  penknife,  but  one  rather 
important  thing-  was  overlooked.  In  those  days  every- 
one carried  a  derringer,  which  looked  like  a  sort  of  toy 
pistol,  but  was  really  one  of  the  most  deadly  close- 
range  emergency  weapons  ever  invented  by  the  evil 
genius  of  man.  Each  person  had  a  pet  place  for  keep- 
ing his  derringer  secreted,  but  handy.  For  myself,  I 
carried  one  in  a  specially  prepared  pocket  inside  of  the 
right  cuff  of  my  coat.  Just  a  practiced  twitch,  and  I 
could  have  it  in  my  hand  ready  for  use  in  an  instant. 
This,  as  I  said,  in  some  way  escaped  the  notice  of  my 
searchers,  so  though  I  was  a  prisoner,  I  remained 
fairly  well  armed. 

All  day  long  the  wires  around  the  world  were  tell- 
ing of  the  great  Chapman  piracy  project,  happily 
nipped  in  the  bud  by  the  efficiency  of  Uncle  Sam's 
government.  One  of  the  facts  that  gave  it  a  peculiar 
interest  was  because  John  Bright's  nephew  was  a  par- 
ticipant. The  story  did  not  lose  anything  by  age  or 
travel.  I  liad  once  a  book  of  newspaper  clippings 
relating  to  the  Chapman  aft'air  and  a  dispassionate 
reading  of  the  more  lurid  descriptions  would  have  sat- 
isfied anyone  that  Greathouse.  Rubery  and  myself  were 
the  nujst  l)loodthirst\-  ])irates  wlio  ever  cut  a  tlu^oat  or 
scuttled   a   ship. 

We  were  taken  to  .\lcatraz  and  later  to  the  old 
Broadway   jail.      Greathouse   was    released   after   a    few 

80 


Wake  to  Find  Warship  Near 

days  of  confinement  on  hail  furnished  hy  his  relative, 
Mr.  Lloyd  Tevis.  Among-  the  pleasant  incidents  of  our 
confinement  were  visits  from  Lieutenant  'J'ompkins  and 
Quartermaster  Judson.  Our  late  enemies  became  our 
best  friends,  brought  us  all  kinds  of  necessaries  and 
refreshments,  including  newspapers,  periodicals  and 
books,  and  in  every  way  sought  to  cheer  us  up  and 
make  our  confinement  less  burdensome.  Rubery,  for 
his  part,  returned  to  Lieutenant  Tompkins  his  letter  of 
retraction,  which  the  latter  seemed  very  glad  to  re- 
ceive, for  in  those  days  no  man  of  honor  cared  to 
have  documents  of  that  kind  floating  around  loose. 
Such  incidents  of  goodwill  between  men  engaged  on 
opposing  sides  in  the  Civil  War  prove  to  my  mind  that 
there  was  no  fundamental  line  of  cleavage,  no  real 
antagonism,  in  fact,  between  the  North  and  South,  and 
if  there  had  been  some  power  to  steady  the  masses, 
instead  of  lashing  them  to  fury,  there  never  would 
have  been   a   war. 

As  for  Law,  he  had  actually  gone  with  us  in  good 
faith  up  to  a  certain  point,  then  had  a  case  of  cold 
feet.  It  occurred  to  his  sordid  mind  that  a  handsome 
sum  of  money  could  be  obtained  from  the  Government 
without  any  risk  at  all,  by  betraying  his  associates. 
He  made  a  cold-blooded,  mercenary  bargain  with  the 
authorities  through  which  he  realized  a  small  fortune, 
disclosed  all  our  plans,  and  our  steps  had  actually  been 
dogged  by  detectives   for   days. 

But  the  first  day  at  Alcatraz  I  nearly  landed  Law. 
T  was  locked  in  a  lath  and  plaster  room.  I  had  not 
been  there  long  before  someone  began  tapping  on  the 

81 


The  Great  Diamond  Hoax 

wall.  After  several  rei)etitions,  thinkiiiL;-  it  mii.;"ht  be 
Ruhery,  I  asked,  "Who  is  there?""  The  acoiisties  were 
admirable.  A  voice  replied,  "That  you,  Ilarpending-? 
This  is  Law.  1  am  under  arrest.  1  want  to  tell  you 
all  about  the  awful  mishap  that  prevented  me  from 
being   with   you   on   the   C"ha])man   la>t   night." 

The  voice  of  the  wretch  drove  me  to  absolute  mad- 
ness. I  knew  he  wanted  to  draw  me  into  admissions, 
probably  had  two  or  three  witnesses  with  him  in  the 
room.  1  simply  thirsted  for  his  blood.  As  before 
mentioned,  the  searchers  on  the  Chapman  had  over- 
looked a  small  penknife  and  a  derringer  concealed  on 
my  person.  My  first  impulse  was  to  take  a  chance 
shot  at  him  through  the  plaster,  but  I  thought  of  some- 
thing better  instantly.  With  my  penknife  I  easily 
bored  an  opening  in  the  wall. 

"Law,"  I  said,  "there  is  something  I  want  you  to 
hear  very  distinctly  and  I  don't  want  to  speak  loud. 
Put  your  ear  to  this  hole  I  have  made  through  the 
wall." 

If  he  had  ever  put  his  ear  to  that  hole  he  would 
certainly  have  heard  something  very  distinctly  and  much 
louder  than  I  intimated.  Also.  ])erha])s.  this  story 
would  not  have  been  written.  lUit  if  such  a  fellow 
can  have  a  good  angel  she  was  not  nap])ing  that  day. 
Law  did  not  i)ut  his  ear  to  the  hole  and  a  few  min- 
utes later  I  heard  the  door  close  behind  him  as  he 
left   the   room. 


82 


CHAPTER  XI. 

Technicalities  Fall  Before  Tri^e  and  PERjrREn 
Testimony  and  Author  Is  Quickly  Convicti:d  oi-^ 
Treason. 

IVe  Find  Consolation  in  Lack  of  Proof  Until  a  Foolish 
Remark  Causes  Weakling  to  Turn  Informer. 

As  I  said,  Rubery,  Libby  and  myself  were  brought 
from  Alcatraz  to  the  Broadway  jail,  while  Greathouse 
was  enlarged  on  bail.  We  remained  there  over  six 
months,  while  the  Government  was  preparing'  for  our 
trial. 

At  that  time  there  was  published  in  San  Francisco 
a  paper  called  the  American  hdag.  It  perished  ])eace- 
fully  after  the  war  ended,  but  while  it  lasted,  outclassed 
every  publication  of  the  North  in  downright  ferocity, 
not  alone  to  the  cause  of  the  South,  but  to  every 
person  of  Southern  parentage.  It  demanded  that  we 
be  tried  on  a  charge  of  piracy — a  capital  offense.  But 
the  closest  examination  of  the  law  proved  that  no  such 
accusation  was  tenable.  The  final  indictment  was  for 
high  treason.  That  also  used  to  be  a  cajiital  crime, 
but  such  a  multitude  of  treason  charges  were  brought 
during  the  war  that  Congress  stayed  the  hand  of  the 
executioner  and  made  the  offense  punishable  only  by 
imprisonment   and    fine. 

Even     that    charge     might     have     come     to     naught. 

83 


The  Great  Diamond  Hoax 

Against  us  was  the  accomplice  Law,  whose  unsup- 
ported evidence  was  not  sufficient.  The  armament 
found  on  the  Chapman  might  have  heen  intended  for 
a  fihbuster  expedition  against  a  Central  American 
State.  The  false  custom-house  papers  might  be  ex- 
])lained  in  the  same  way,  also  the  secret  preparations 
for  leaving  the  port,  for  the  United  States  Govern- 
ment was  bound  to  intercept  any  illicit  expeditions 
against  friendly  powers.  Some  general  literature  of 
an  inflammatory  "secesh"  character  was  found  on  us, 
but  our  natural  inclinations  were  a  matter  of  public 
knowledge  in  San  Francisco.  iMually  the  scraps  of 
torn  paper  collected  on  the  Chapman  by  Captain  Lees 
and  pasted  together,  while  incriminating,  were  not 
complete  and  hardly  admissible  in  a  court  of  justice. 
In  other  words,  while  there  was  an  ocean  of  suspicion, 
the  prosecution  could  offer  very  little  proof.  Our  best 
friends  knew  that  the  indictment  was  true  enough,  but 
to  maintain  it  according  to  the  rules  of  evidence  was 
another  thing. 

Tlie  needed  testimony,  however,  was  sui)])lied  through 
some  senseless  talk  of  Greathouse.  I  have  always  con- 
tended that  a  man's  worst  enemy  is  his  mouth,  and 
there  never  was  a  better  illustration.  Greathouse  vis- 
ited us  one  day  at  the  Broadway  jail.  He  was  hand- 
somely caparisoned,  full  of  spirits  and  I  think  had  just 
risen  from  a  good  dinner,  or  rather  lunch.  Libby 
aske^l  him  anxiously  about  our  prospects.  "Well,"  said 
Greathouse,  "they  are  not  exactly  flattering.  I  guess 
all  of  us  will  have  to  go  to  prison  for  a  long  term, 
but,"   he   added    somewhat   grandly,    "T    will    be   al)lc    to 

84 


Author  Convicted  of  Treason 

buy  my  way  out."  lie  didn't  say  a  word  al)out  the 
rest  of  us. 

This  remark  started  Lihl)y  to  thinking.  He  was 
scared  stiff  before.  Now  he  became  a  nervous  wreck. 
He  knew  that  Greathouse  was  powerful  enough  to  be 
at  large  on  bail.  He  knew  that  Rubery  and  I  had 
influential  connections.  He  was  himself  a  poor  fellow 
from  Canada,  adrift  on  tlie  Pacific  Coast,  without  a 
cent  or  a  friend.  He  saw  himself  made  what  we  mod- 
erns call  the  "goat"  for  the  whole  Chapman  incident 
and  concluded  that  the  wisest  thing  was  to  look  out 
for  his  own  hide.  Somehow  I  have  never  had  it  in 
my  heart  to  blame  Libby  overmuch  for  whatever 
happened.  My  impression  is  that  he  intended  to  "sit 
tight"  until  he  thought  himself  left  in  the  lurch. 

Be  that  as  it  may,  the  day  after  the  visit  of  Great- 
house,  Libby  sent  for  the  L^iitcd  States  District  Attor- 
ney, made  a  complete  statement  of  all  he  knew  con- 
cerning the  outfitting  of  the  Chapman  and  our  designs 
against  the  commerce  of  the  coast,  adding,  I  am  sorry 
to  say,  some  details  that  were  false. 

This  confession,  brought  on  as  I  believe  by  the  fool- 
ish talk  of  Greathouse.  absolutely  sealed  our  doom. 

We  were  brought  to  trial  on  October  2  in  the  United 
States  Circuit  Court,  Judge  Stephen  J.  Field  and  Judge 
Ogden  Hofifman  sitting  in  bank,  with  an  array  of  emi- 
nent counsel  on  each  side.  It  did  not  take  long  to 
pick  a  jury  in  those  days.  The  very  dogs  of  San 
Francisco  knew  of  the  Chapman  case,  vet  the  twelve 
good  men  and  true  who  swore  they  were  unbiased 
were  impaneled   in  less   than   an   hour.      Some   of  them 

85 


The  Great  Diamond  Hoax 

were  later  noted.  Here  are  the  names :  John  Wlieeler, 
Jacoh  Schneber.  A.  S.  Iredale,  Samuel  Milll)ur\'.  Joseph 
D.  Pearson.  Joseph  A.  Conboie.  G.  W.  Chesley,  J.  K. 
Osgood,  James  W.  Towne  and  \\\  P.  C.   Stebbins. 

The  evidence  agamst  us  was  overwhelming.  Law 
and  Li])b\-  told  their  stories  in  great  detail.  About 
half  of  it  was  rank  perjury.  They  related  conversa- 
tions that  never  took  place.  Also  incidents  that  ex- 
isted only  in  their  imaginations.  Everything  was  set 
forth  in  its  blackest  light.  The  witnesses  were  well 
drilled  and  were  not  shaken  by  cross-examination.  All 
of  the  other  incidents  were  proved,  the  purchase  of  the 
ship  through  a  custom-house  broker  named  Bunker, 
the  purchase  of  cannon  and  arms,  the  false  manifest 
of  the  vessel  and  the  assemblage  of  a  considerable 
fighting  force.  The  Government  also  proved  that  Great- 
house  and  myself  were  citizens  of  the  United  States, 
not  of  the  revolted  States,  while  Rubery  was  classed  as 
a  common  foreign  adventurer.  This,  it  seems,  was 
necessary  to  establish  the  charge  of  high  treason. 

Our  lawyers  made  the  best  of  a  bad  job.  They 
argued  manfully  many  points  of  law  concerning  which 
I  have  no  recollection,  except  that  they  contended  that 
the  mere  loading  of  a  ship  with  arms  did  not  consti- 
tute a  crime  any  more  than  buying  a  pistol  constituted 
murder ;  that  in  order  to  constitute  the  overt  act  the 
shi])  must  sail  for  its  destination.  ( )n  this  ]i()int  the 
court  held  that  leaving  the  wharf  and  laying  to  in  the 
stream    constituted    "sailing." 

Finally  our  counsel  made  a  grandstand  bluff.  They 
declared  that  witnesses,  then  in  Mexico,  could  clear  u]) 

86 


Author  Convicted  of  Treason 

the  whole  transaction,  bnt  in  tlie  absence  of  these  they 
were  compelled  to  snhmit  the  case  witliont  teslitnony. 
None  of  us  took  tlie   stand. 

The  lawyers  nnliml)ercd  the  usual  forensic  lore,  illu- 
mined by  bursts  of  fiery  elocjuence.  Both  the  jud^^es 
charged  dead  against  us.  However,  judge  lloffman 
threw  me  the  following-  judicial  bouquet: 

"For  the  accused  T  feel  a  deep  reg'ret,  especially  for 
one  of  them  who  appears  to  have  been  animated  more 
by  a  zeal  for  the  cause  which  he  has  unhappily  es- 
poused than  by  the  sordid  and  unworthy  motive  of 
enriching  himself  by  the  plunder  of  his  fellow-citizens. 
It  is  to  be  reg-retted  that  the  courag^e  and  willing-ness 
to  sacrifice  himself  for  the  benefit  of  his  associates,  a 
slight  glimpse  of  which  has  been  revealed  by  the  evi- 
dence, have  been  wasted  on  an  enterprise  which  is 
indefensible  in  morals  as  it  is  criminal  in  law." 

It  took  the  jurv  just  four  minutes  to  bring  in  a 
verdict  of  guilty  of  high  treason. 

A  few  days  later  we  were  brought  into  court  and 
sentenced  each  to  ten  years'  imprisonment  and  to  pay 
a  fine  of  $10,000.  The  county  jail  was  named  as  the 
place  of  our  confinement  until  the  Government  of  the 
United  States  directed   our  imprisonment  elsewhere. 

As  for  Law  and  Libby,  they  were  secretly  placed  on 
board  a  ship  bound  for  China  by  the  United  States 
authorities,  and  were  never  heard  of  afterward,  though 
1  took  some  ])ains  to  learn  their  fate. 

So  ended  the  famous  story  of  the  so-called  "Chap- 
man piracy."      1   have  given  the  details  at  some  length 

87 


The  Great  Diamond  Hoax 

because,  while  in  itself  rather  trivial,  it  has  been  made 
to  cut  quite  a  figure  in  history.  The  facts  have  been 
so  outrageously  distorted  that  I  thought  it  best  for  some 
one  having  full  personal  knowledge  of  every  detail  to 
tell  the  truth. 

Libby's  first  name  was  Lorenzo.  People  often  ask. 
"What's  in  a  name?"  Perhaps  nothing;  but  I  think 
otherwise.  Lorenzo  Libby  helped  to  land  me  in  prison. 
Lorenzo  Smith  did  me  up  in  a  business  deal,  and  I 
have  unpleasant  recollections  of  Lorenzo  Sawyer,  once 
on  the  Federal  bench  of  San  Francisco.  I  never  see 
a  man  christened  "Lorenzo"  without  an  imjiression  that 
he  will  bear  a  heap  of  watching. 


88 


CHAPTER  XII. 

Arrest  of  Accomplice  Alarms  Alithor  and  ox  Ad- 
vice OF  Friends  He  Takes  Fliciit. 

Amnesty   Act    Unlocks   Prison    Doors    of   Conspirators. 
But  Fails  to  Bring  Security. 

In  war  times,  the  American  Eag"le  was  not  a  Ijlood- 
thirsty  bird.  We  began  to  have  sympatliizers.  even 
among  prominent  Union  men. 

Greathouse  was  released  after  a  brief  confinement 
under  a  general  amnesty  act  and  upon  taking  the  oath 
of  allegiance.  Ruberv,  a  foreigner,  could  not  take  ad- 
vantage of  the  amnesty  act.  However,  at  the  request 
of  John  Bright,  President  Lincoln  granted  him  a  free 
pardon.  But  the  astute  statesman  arranged  that  his 
precious  nephew  should  not  be  involved  in  future 
trouble  because  of  his  Southern  proclivities.  He  was 
placed  on  a  Pacific  Mail  steamer  and  transferred  at  the 
Isthmus  to  a  British  ship  bound  for  England.  We 
had  an  affectionate  parting,  with  the  hope  that  we 
might  again  meet,  a  wish  that  was  realized  in  a  dra- 
matic manner. 

I  alone  was  held,  because  it  had  been  shown  tliat  1 
had  a  commission  in  the  Confederate  Navy.  In  al- 
most exactly  four  months  after  my  sentence,  I  was 
brought  before  Judge  Hoffman  and  ordered  released, 
under    the    same    general    amnesty    act.      The    fine    was 

89 


The  Great  Diamond  Hoax 

likewise  remitted.  I  am  not  versed  in  legal  technicali- 
ties, but  it  seemed  to  me  that  the  learned  jurist 
stretched  the  strict  letter  of  the  law  a  bit  in  my  behalf. 
Be  that  as  it  may,  I  always  held  tlie  name  of  Hoffman 
in  high  esteem. 

I  was  free  at  last,  but  onl\'  to  enter  into  a  new  kind 
of  bondage.  I  was  broke.  The  fortune  I  had  won  by 
incredible  g"ood  luck  liad  vanished  absolutely.  What 
was  worse,  mv  mine  in  Mexico  was  abandoned  during 
the  French  invasion  and  my  title  to  it  finally  lost.  It 
yielded  wealth  to  other  owners  later  on.  I  never  saw 
my  old  chum  Don  Miguel  Paredis  again,  but  he  kept 
his  money  and  cut  quite  a  figure  in  Mexican  affairs. 

When  I  stepped  out  of  Broadway  jail  I  was  out- 
wardly chesty,  but  inwardly  depressed,  for  I  had  just 
eight  dollars  and  fifty  cents  to  my  name.  Having 
been  a  free  spender  at  one  of  the  leading  hotels  in 
my  capitalistic  days,  I  went  to  the  proprietor  and 
frankly  made  a  clean  breast  of  my  impecuniosity.  He 
was  overjoyed  to  receive  me  as  his  guest,  gave  me  a 
fine  room  and  settled  all  my  anxiety  as  to  lodging  and 
three  scjuare  meals  a  day.  That  was  nothing  out  of 
the  common  in  the  old  days.  But  I  would  like  to  see 
the  photograph  of  a  man  with  nerve  enough  to  make 
such  a  proposition  to  the  manager  of  one  of  our  first- 
class  hotels  in   the  present  generation. 

Still  my  financial  affairs  gave  me  no  little  concern. 
I  tiiought  of  writing  to  my  father  for  teinporary  as- 
sistance, but  there  was  an  impediment  even  there. 
W'liile    I    was    raising   Cain,   and    wasting   my   substance 

90 


THE    AUTHOR'S    FATHER 

A.    Harpending    Sr.,    a    supporter 

of   the   Union 


Arrest  of  Accomplice  Alarms  Author 

for  the  South  in  Cahforiiia,  my  progenitor  was  one  of 
the  strongest  Union  men  in  Kentucky.  Some  rather 
crisp  correspondence  had  passed  between  us  on  that 
subject.  Doubtless  he  would  have  been  glad  enough 
to  assist  or  welcome  the  prodigal.  But  I  was  too  ])roud 
to  seek  his  aid. 

This  may  justify  a  word  of  explanation.  My  father 
was  a  lineal  descendant  of  Baron  Harpending.  who 
came  to  New  York,  New  Amsterdam,  with  the  orig- 
inal settlers  from  Holland.  It  was  one  of  his  an- 
cestors who  gave  a  lease  for  ninety-nine  years  to  the 
Dutch  Reformed  Church  of  a  piece  of  property  in  the 
business  center  of  New  York,  now  worth,  approxi- 
mately, three  hundred  million  dollars.  It  was  another 
Trinity  Church  case,  with  this  exception,  that  there  wa.'^ 
no  doubt  about  the  lawful  heirs  when  the  lease  ter- 
minated. My  father  brought  suit  to  recover  the  prop- 
erty. That  was  one  of  the  great  lawsuits  of  the  last 
century.  Henry  Clay,  Daniel  Webster  and  Judge  Un- 
derwood were  my  father's  counsel.  He  won  the  case 
in  the  lower  courts,  but  was  vanquished  in  the  Supreme 
Court  of  the  United  States  on  a  technicality  by  a  four 
to  three  decision.  The  family  lost  the  vast  property, 
but  the  church  still  displays  the  Harpending  arms,  as 
required  by  the  lease  of  my  ancestor,  executed  nearly 
175  years  ago. 

My  mother,  on  the  other  hand,  was  of  the  Clark 
family  of  Virginia,  which  settled  in  Kentucky  over  a 
hundred  years  ago.  Slie  was  of  th.c  typical  Southern 
strain.  Thus,  wdiile  my  father,  with  his  Northern  an- 
tecedents, was  an  ardent  supporter  of  the  Union  cause. 

93 


The  Great  Diamond  Hoax 

I  had  the  maternal  blood  in  my  veins.  How  we  came 
to  take  opposite  sides  in  the  great  civil  struggle  was  an 
instance  of  plain  heredity,  nothing  more. 

r.ut  that  has  nothing  to  do  with  this  story.  While  I 
was  worrying  over  finances,  not  knowing  which  way  to 
turn  and  mighty  downcast  and  blue-deviled.  I  was 
suddenly  informed  that  my  companion,  ^\r.  Ridgley 
Greathouse.  had  been  rearrested  and  was  in  custody. 
Ignorant  of  the  charge  and  not  having  the  wherewithal 
to  flv.  to  say  nothing  of  inclination.  I  determined  to 
put  on  a  bold  front,  walked  down  to  the  United  States 
marshal's  office  and  asked  him  if  he  wanted  me. 

The  mental  processes  of  that  functionarv  were  of  a 
leisurelv  nature.  He  looked  me  over  with  great  care, 
scratched  his  head  with  a  pen  in  a  meditative  way. 
slew  a  distant  fly  with  a  well-directed  squirt  of  tobacco 
juice  and  answered,  weighing  each  word,  "\\'ell,  not 
to-day,  but  I  guess  I  will  to-morrow.  Where  do  you 
live?" 

I  gave  him  the  name  of  my  hotel  and  the  number  of 
my  room,  which  data  being  duly  noted,  we  bade  each 
other  good-day.  To  tell  the  truth.  T  was  badly  rattled. 
Nothing  seemed  more  certain  than  that  I  was  doomed 
to  incarceration  on  a  new  charge,  and,  having  enjoyed 
the  public  hospitality  for  almost  a  year,  I  had  no 
stomach    for  any  more. 

Just  as  I  reached  my  hotel,  filled  with  these  dis- 
turbing thoughts,  a  friend  asked  me  to  go  with  him  to 
a  business  office.  I  sat  down  in  tlie  reception  room, 
while  my  friend  disappeared  in  a  rear  office.  I  could 
hear  the  sound  of  voices  and  the  clink  of  gold.     Pres- 

94 


THE    AUTHOR'S    MOTHER 

Mrs.    A.    Harpending    Sr.,    an    ardent 

Southern    sympathizer 


Arrest  of  Accomplice  Alarms  Author 

ently  my  friend  reappeared,  carrying  a  small  coin  sack. 
"Harpending-,"  he  said,  "yon  are  certain  to  l)c  arrested 
on  some  sort  of  an  accusation.  The  Yankees  will  never 
let  yon  stay  at  large.  There  are  fifteen  of  us  who  have 
snl:)scrihed  a  hundred  dollars  each.  Here  is  the  money. 
We  will  also  provide  you  a  good  horse  and  necessary 
equipment.     You  must  leave  to-night." 

I  asked  the  privilege  of  meeting  my  friends  and  was 
accorded  the  privilege.  Several  were  not  overburdened 
financially,  and  $1,500  was  more  than  I  could  reasonably 
need.  I  selected  the  three  richest,  gave  each  of  them 
my  promissory  note  for  $100,  and  returned  the  other 
contributions.  We  talked  more  or  less  of  plans.  I 
was  advised  to  ride  south  to  the  neighborhood  of  Santa 
Cruz,  across  the  mountains  to  the  plains,  and  journey 
thence  through  the  San  Joaquin  Valley  to  what  was 
then  known  generally  as  the  "Tulares."  where  such  in- 
habitants as  there  were  came  mostly  from  the  South 
and  where,  more  important  still,  the  law  writs  did  not 
run. 

So,  shortly  after  dark,  I  made  my  preparations  and 
proceeded  to  put  as  many  miles  between  myself  and 
San  Francisco  as  the  means  of  travel  would  permit. 
I  turned  down  the  horseback  proposition,  slipped  on  a 
southbound  train  in  the  evening  and  before  midnight 
reached  its   terminus,   San  Jose. 


97 


CIIArTF.R   XTir. 

Hits  for  tmk  llii-i.s  ix  l-j-i-oRT  lo  Lose  Pursuers, 
Passes  Oxe  Goon  riiixc  and  Stu.mbles  Into  a 
Bonanza. 

Conipaitx  of  Sohiirrs  Goes  to  Arrest  Him:  Is  Taken 
into  Ciunf  and  J\vy  Soon  After  liverytJiini:^  Is 
fine. 

I  staved  overnight  at  San  Jose  at  the  liouse  of  a 
friend,  a  stanch  Southern  sympathizer,  who  had  heen 
advised  hy  wire  tliat  he  niii^ht  expect  a  jJiiest  by  the 
late  train.  The  next  niornin";-  bright  and  early  I  left 
with  a  companion  and  a  stout  team  for  Santa  Cruz. 
On  the  outskirts  of  that  town — pardon  me,  city — my 
companion  left  me  late  in  the  afternoon,  directing  me 
to  a  house  of  accommodation  kept  by  a  man  I  knew, 
of  strong  "secesh"  proclivities. 

I  passed  into  the  waiting  room,  where  a  number  of 
men  were  standing.  The  ])ro])rietor  received  me  with 
evident  agitation  and  invited  me  to  a  room  upstairs. 
"'Mr.  I  larjiending.""  lie  >aid.  "the  sheriff  has  received  a 
telegram  from  tlie  I'nited  .States  Marshal  to  detain  you 
if  you  ])ass  this  wa\'.  I  le  will  hear  of  the  arrival  of  a 
stranger,  answering  }()ur  description,  as  a  number  saw 
\ou  inter  mv  house.  lUil" — and  liere  he  ripped  out  an 
awful   oath,  none  of  your   feelile   modern   profanity — "I 

98 


Hits  for  Hills  to  Lose  Pursuers 

will  send  for  some  of  the  boys  and  \vc  will  have  one 
devil  of  a  fight  before  he  takes  you." 

I  could  see  that  the  man  was  capable  of  anything 
desperate — I  excused  myself  for  a  moment  to  get  my 
luggage,  slipped  down  stairs  to  the  waiting  room,  took 
the  small  handbag  that  contained  my  personad  belong- 
ings, went  out  the  rear  door  and  took  the  road  toward 
Gilroy  on  foot.  I  hadn't  any  plan  in  view — just  walked 
on  well  into  tlie  night  until  1  was  exhausted  with 
fatigue  and  lack  of  food. 

"Youth  will  not  be  denied,"  is  an  old  saying.  I 
passed  a  house  where  the  lights  were  still  burning  and 
determined  to  seek  a  place  of  shelter.  T  knocked  at 
the  door.  To  my  astonishment  and  joy.  it  was  opened 
by  a  man  called  Clark,  of  Southern  1)irth.  wlioin  I  had 
met  several  times   in   San   Francisco. 

Clark  received  me  like  a  long-lost  brotlier,  roused 
the  household,  had  an  old-fashioned  Southern  meal  pre- 
pared^ that  made  me  think  of  home,  and  an  hour  later 
I  w-as  sound  asleep  in  a  comfortable  bed,  safe  among 
friends. 

The  next  evening  Mr.  Clark  accompanied  me  to  Gil- 
roy. where  T  was  concealed  in  the  hotel  of  a  nuitual 
friend  for  two  days,  waiting  for  a  soutlil)ound  stage 
that  journeyed  across  the  mountains  to  the  San  Joa- 
quin A'alley  and  thence  to  A'isalia  in  Tulare  County. 

There  were  two  passengers  on  the  stage  when  I 
boarded  it,  a  gentleman  called  Ryington  and  his  friend, 
Thomas  Staples.  P.yington's  son  was  afterward  District 
Attorney  of  San  Francisco  for  several  years.  The 
gentleman   recognized   me   at   once  and   as   we   traveled 

99 


The  Great  Diamond  Hoax 

along"  I  found  that  he  wasn't  a  half-bad  secessionist 
himself.  He  told  me  that  he  and  his  friend  were  bound 
to  inspect  a  mine  in  which  they  were  interested  at  a 
place  called  Kemville.  about  125  miles  southeast  of 
A'isalia.  He  advised  me  that  it  was  a  notable  localit>- 
to  "hole  up"  and  avoid  observation  indefinitely :  that 
the  '"ville."  in  fact,  comprised  only  a  few  shacks,  appur- 
tenant to  the  mine,  which  was  just  in  the  early  stages 
of  development. 

It  was  in  the  winter  of  186-1 — the  winter  of  the 
awful  drought  when  scarce  a  drop  of  rain  fell  in  Cali- 
fornia. The  weather  was  like  midsummer.  The  great 
valley  then  only  had  a  few  straggling  settlements.  The 
vast  prospect  was  unbroken  save  when  here  and  there  a 
miniature  whirlwind  in  the  distance  raised  a  spiral  of 
sand  sk\'ward  from  the  parched  ground,  or  where  a 
band  of  dust-laden,  half-famished  sheep,  staggered  on 
toward  the  mountains  to  escape  from  a  universal  deso- 
lation. What  a  diflFerent  prospect  now.  To  one  who 
saw  those  unbroken  solitudes,  that  are  to-day  among 
the  busiest  haunts  of  men.  with  fine  cities,  railroads. 
power  lines,  immense  systems  of  irrigation,  intensive 
agriculture,  oil  fields — evervthing  in  short  that  goes  to 
make  prosperity  and  a  high  civilization. — nothing  is 
more  impressive  of  what  a  few  brief  decades  of  enter- 
prise can  bring  forth. 

As  there  was  a  small  military  post  at  Msalia.  when 
we  neared  that  town  I  made  a  detour  on  foot  and 
joined  Messrs.  Byington  and  Staples  to  the  eastward. 
We  reached  Kern  without  any  noteworthy  incident. 
The  place  was  exactly  as  Mr.  Byington  described  it — 

100 


Hits  for  Hills  to  Lose  Pursuers 

a  collection  of  slal)  shacks  to  shelter  a  few  men  cngaj^ed 
on  development  work  on  the  mine.  This  was  known 
as  the  "I'ns:;  Blue."  It  was  an  immense  ledge  of  bluish 
quartz,  and  was  enjoying  a  boom  on  the  San  Francisco 
stock  market.  Byington  was  a  type  of  the  Calif ornians 
of  the  '60s,  who  were  read}^  to  go  into  any  mining 
stock  venture,  almost  to  the  extent  of  their  fortunes, 
without  knowing  anything  more  about  the  actual  busi- 
ness than  so  many  cottontail  rabbits.  At  his  request,  I 
examined  the  "Big  Blue,"  and  didn't  like  the  looks  of 
things  at  all.  The  superintendent  raved  about  the  rich- 
ness of  the  ore,  showed  us  fabulous  assays,  but  there, 
staring  us  in  the  face,  was  a  stamp  mill  that  liadn't 
turned  a  wheel  for  months.  I  satisfied  myself  that 
while  there  were  here  and  there  small  bunches  of  ore, 
sufficient  to  furnish  seductive  looking  assays,  the  gen- 
eral vein  matter  was  far  too  low  to  be  worked  to  a 
profit.  As  for  the  outlook,  that  was  another  thing. 
The  mine  might  prove  to  be  rich  at  a  greater  depth, 
but  the  chances  were  at  least  50  to  1  that  it  woiddn't. 
I  advised  Byington  to  tuiload  his  stock  while  he  could, 
which  he  did  to  his  great  advantage.  A  few  months 
later,  "Big  Blue"  stock  certificates  weren't  worth  ])ick- 
ing  up  in  the  street.  Nevertheless,  "Big  Blue"  was 
the  inspiration  for  several  later  mining-camp  crazes. 
Among  others.  Senator  J.  P.  Jones  of  Nevada  dropped 
a  good-sized  fortune  in  it. 

I  became  known  at  Kernville,  and  as  ]ieople  were 
traveling  to  and  fro,  it  was  certain  that  my  retreat 
would  soon  be  common  property  to  my  enemies  as 
well  as  my  friends ;  so  I   decided  to  seek  solitude  and 

101 


The  Great  Diamond  Hoax 

efface  myself.  With  three  companions  of  a  roving"  na- 
ture, we  struck  out  for  the  mountains,  and  for  some 
time  enjoyed  the  dehghtful.  care-free  hohemian  exist- 
ence that  cannot  be  found  in  many  places  outside  of 
California. 

I  hadn't  forgotten  my  old  mining  habits.  One  day 
I  picked  up  a  number  of  fragments  of  quartz,  broken 
by  the  weather  from  a  ledge  that  had  a  likely  look. 
I  took  these  to  our  camp,  crushed  them  in  a  primitive 
way,  "panned"  the  product  and  stood  aghast  with  aston- 
ishment at  the  result.  A  long,  heavy  "tail"  of  gold  in 
the  pan  told  that  the  rock  must  be  worth  hundreds 
of  dollars  a  ton. 

There  is  something  about  gold — just  the  metal — that 
makes  people  forget  everything  else  in  life.  A  little 
prospecting  showed  us  that  we  were  in  the  heart  of  a 
great  gold-bearing  district,  with  surface  croppings  of 
such  value  that  all  a  man  needed  for  working  capital 
was  a  pick,  a  pan,  a  couple  of  hammers  and  a  mule  to 
carry  the  rock  to  water,  where  it  could  be  hand-crushed 
and  washed.  Even  the  mule  could  be  dispensed  with 
if  one  did  not  mind  the  labor  of  shouldering  an  ore 
sack  for  a  short  distance  every  day.  We  were  rich  and 
gold-mad. 

Realizing  the  importance  of  the  discovery  I  sent  one 
of  my  comi)anions  to  collect  enough  men  to  form  a 
mining  district  under  the  existing  laws.  These  assem- 
bled, we  perfected  an  organization  anrl  elected  officers. 
Somewhere  in  the  Book  of  Genesis  mention  is  made  of 
a  river  in  Paradise  running  through  the  land  of 
"Havilah,    a   country   rich    in   gold."     We    were   shy   on 

102 


Hits  for  Hills  to  Lose  Pursuers 

the  river.  Init  the  halanee  of  the  ([uotatioii  seemed  a])- 
propriate  enough,  so  I  christened  the  ])roposed  town 
"Havilali."  The  district  was  called  "Clear  Creek," 
under  which  title  it  was  famous  for  many  a  year.  Also 
I  showed  judgment  and  forethought  in  a  real  estate 
way,  claiming  and  staking  off  a   natural  townsite. 

T  didn't  dare  to  go  down  into  the  settled  district  to 
purchase  anything  like  machinerv.  for  fear  of  arrest,  hut 
we  constructed  rude  arastras,  ])rimitive  Si)anish  cjuartz 
mills,  and  hegan  to  turn  out  gold  hullion  in  astonishing 
amounts.  Something  concerning  a  new  gold  discovery 
began  to  leak  out  and  occasional  prospectors  joined 
our  camp.  We  had  no  end  of  provisions,  plenty  of 
fresh  meat  and  sort  of  ke])t  open  house.  All  in  all.  il 
was  about  the  best-ordered  mining  camp  I  ever  saw. 

But  the  big  boom  for  the  camp  came  through  my  old 
journalistic  enemy,  the  American  blag.  Word  came  to 
it  somehow  that  I  was  located  in  the  mountains  back 
of  Kern  City,  ostensibly  engaged  in  mining.  Straight- 
way it  gave  me  a  terrific  blast,  claiming  that  mining 
was  onlv  a  cloak  for  a  new  piece  of  deviltry  I  was 
hatching.  The  effect  of  this  was  that  it  located  me 
for  a  lot  of  my  Southern  friends  who  really  believed 
that  I  was  organizing  a  band  to  fight  through  to  Texas, 
and  as  a  consequence  they  began  to  swarm  into  Havilah 
in  large  numbers.  Nearly  all  my  fighting  men  of  the 
Chapman  were  among  the  first  arrivals.  Also  several 
Northern  men.  fired  bv  the  word  "gold,"  took  a  chance 
of  entering  into  an  alleged  stronghold  of  conspirators. 
They  would  have  marched  into  hell,  just  the  same,  for 
gold.      They   had    the    same    reception    as    anyone    else. 

103 


The  Great  Diamond  Hoax 

Far  up  in  the  mountains,  away  from  strife  and  faction, 
these  men  mingled  in  perfect  amity  and  good  fellow- 
ship. It  was  anotlier  illustration  of  what  I  said  before 
— that  if  the  people  had  been  left  to  settle  matters  in 
their  own  way  there  never  would  have  been  a  Civil 
War.  Chattel  slavery  in  the  South  was  fast  dying  at 
the  root.  Another  decade  or  so  would  have  seen  its 
finish.  And  the  real  question  of  slavery  was  not  settled 
at  all.  There  have  grown  up  other  forms  of  slavery 
far  more  odious  and  soul-destroying  than  the  mild  sys- 
tem maintained,  with  very  few  exceptions,  in  the  South. 
It  was  the  agitators  and  demagogues  on  both  sides,  who 
never  fought  at  all,  upon  whom  must  rest  the  responsi- 
bilities of  our  war,  just  the  same  as  in  nearly  every 
other  historic  struggle.  Strangely  enough,  these  men 
are  commonly  canonized,  instead  of  being  held  up  to  the 
execration  of  mankind. 

Havilah  was  fast  becoming  a  large  proposition.  Its 
trade  was  eagerly  sought  for  and  pack  trains  of  supplies 
were  arriving  daily.  But  the  more  it  grew,  the  louder 
and  longer  raved  the  American  Flag  about  the  band  of 
outlaws  in  the  mountains,  headed  by  the  i^iratical  Har- 
pending.  So  specific  were  the  denunciations  that  at 
length  they  seriously  attracted  the  notice  of  the  Govern- 
ment. Finally  a  detachment  of  troops  stationed  at 
Visalia  was  dispatched  to  drive  us  out. 

We  had  timely  notice  of  this  kindly  intention.  I  had 
been  recognized  as  a  sort  of  leader,  partly  because  of  my 
position  as  the  largest  owner  of  the  district,  ])artly  be- 
cause of  the  newspa])er  notoriety,  which  had  given  me 
the  character  of  a  daring  adventurer — the  character  that 

104 


Hits  for  Hills  to  Lose  Pursuers 

impresses  the  rough  natures  of  a  mining  camp.  y\ll  the 
miners  were  called  together.  Lookouts  were  stationed 
down  the  canyon  to  give  nriticc  of  the  approach  of  a 
hostile  force.  I  had  decided  to  adopt  Alhert  Sidney 
Johnston's  strategy  and  try  the  moral  efifect  of  a  surjirise. 

Hut  the  wily  soldier  in  cf)niniand  did  not  come  hy  the 
usual  route.  Early  in  the  morning  we  heard  the  sound 
of  cavalry  tramping  down  the  mountain  side.  We  were 
prepared  for  that.  The  officer  and  his  troopers,  about 
eighty  in  all.  walked  into  an  ambuscade  and  suddcnl}' 
found  themselves  confronted  by  four  times  their  numl)cr. 
raw-boned,  bearded,  athletic  miners,  each  armed  to  the 
teeth.  I  stepped  forward,  saluted  the  officer,  who  seemed 
a  trifle  rattled,  congratulated  him  on  being  just  in  time 
for  breakfast  and  carelessly  asked  him  if  he  had  lost  his 
way. 

The  officer  replied,  in  a  surly  fashion,  that  his  business 
was  to  disperse  a  band  of  cut-throats  and  rebels.  I 
answered  tliat  he  could  hardly  mean  us  ;  that  we  were 
peacefully  pursuing  a  lawful  occupation ;  that  we  were 
readv  to  submit  to  legal  authority,  but  must  first  know 
the  nature  of  our  offense.  T  urged  him  to  examine  the 
camp,  interview  some  well-known  I^nion  men  who  were 
with  us  and  satisfy  himself  that  we  were  neither  out- 
laws nor  rebels.  There  was  nothing  for  him  to  do  but 
make  the  best  of  a  bad  bargain.  Tlio  troopers  rode  to 
camp  with  their  miner  escort,  liad  a  jolly  good  break- 
fast, with  more  or  less  joshing  on  cither  side,  and  that 
part  of  the  incident  closed  in  a  happy  way.  TUit  the 
officer  declined  to  be  comforted.  He  was  clearly  morti- 
fied at  our  successful  strategy. 

105 


The  Great  Diamond   Hoax 

We  all  knew  that  this  was  oiih'  a  res])ite — that  more 
serious  trouble  was  ahead.  lUit.  in  fact,  it  proved  the 
cam])'s  salvation.  A  gentleman  called  Sumner — T  for<:^et 
his  other  name — a  Xortherner  of  character  and  standini^, 
who  knew  all  about  our  case,  came  to  our  defense  in 
San  Francisco.  T  also  sent  a  full  statement  of  our  case 
to  my  friend.  Colonel  Crockett,  later  a  Jtistice  of  the 
Su])reme  Court.  These  two  waited  on  General  Mc- 
Dowell, in  command  of  the  Department  of  the  Tacitic, 
and  so  far  convinced  him  that  he  sent  rather  ])crcmp- 
tory  orders  to  A'isalia  not  to  interfere  with  us  further, 
except  on   direct  command. 

At  the  same  time  I  was  advised  that  T  was  free  to  go 
to  anrl  from  San  Francisco :  that  there  never  had  been, 
in  fact,  a  charge  against  me ;  that  the  rearrest  of  Mr. 
Creathouse  was  in  no  way  connected  with  myself ;  that 
the  United  States  marshal  had  only  been  advised  to  keep 
an  eye  on  me  :  that  he  had  only  wired  the  Sheriff  at 
Santa  Cruz  to  do  the  same. 

In  other  words.  I  had  fled  from  a  man  of  straw — from 
a  lighted  i)um])kin  head  in  a  dark  room — and  had  stum- 
bled over  a  fortune. 

With  sufficient  money.  T  made  haste  to  San  Fran- 
cisco, ]>aid  u^\■  trilling  debts,  not  overlooking  the  hotel 
keeper;  bought  a  f|uartz  mill  and  appurtenances,  rushed 
it  down  the  valley  and  had  the  stamps  falling  in  record- 
breaking  time. 

The  year  186.^  was  a  busv  one  for  Ifavilah  and  the 
Clear  Creek  mining  district.  It  became  a  heav\'  gold 
producer — miners,  cai)italists,  speculators  swarmed  into 
it   frr)m   all   o\'er  the    Pacific  '-lope.      1    laid   out   ui\'   town- 

106 


Hits  for  Hills  to  Lose  Pursuers 

site  in  due  season  and  sold  it  out  at  fancy  tij^ures.  'J"he 
main  street  liroui;lU  an  averai^e  of  $20  i)cr  foot.  A 
boom  v;as  on  all  along"  the  line.  I  was  ofifered  fancy 
prices  for  mv  mining  claims.  I  Kt  them  go.  My  prin- 
ciple was  to  avoid  what  is  vulgarly  known  as  "hoggish- 
ness."  When  I  could  make  a  million  1)\-  a  l)usines^  turn 
I  considered  it  a  good  day's   work. 

lUit  as  a  matter  of  fact,  I  only  cleaned  uj)  with 
$800,000.  Idiat  is  what  1  hanked  in  San  I'rancisco  long 
before  the  end  of  1865. 

The  town  of  TIavilali  ])rosi)ere(l  mightilw  .\t  one  time 
it  nuist  have  numhercd  nearly  3000  inhabitants.  Tt  was 
a  brisk  center  with  hotels,  livery  stables,  large  merchan- 
dise stores,  law\ers.  doctors,  ])reachers.  o])en  gambling 
houses,  hurdv-gurdies.  saloons,  banks,  bagnios  and  the 
other  evidences  of  advanced  civilization. 

Not  only  that.  l)Ut  its  enter])rising  inhabitants  a|)peared 
before  the  next  legislature  and  asked  for  the  creation  of 
a  new  county.  Though  b_\-  that  tiiue  a  i)ermanent  resi- 
dent of  San  Francisco.  I  assisted  in  the  passage  of  a  bill 
that  cut  off  from  Tulare  the  county  of  Kern,  and  named 
1  iavilah  the  county  seat.  It  so  remained  until  the 
decline  of  mining  and  the  growth  of  agriculture  in  the 
lowlands  moved  the  capital  to  Bakersfield. 

These  statements  can  be  verified  by  offtcial  records  of 
Kern  county  and  of  the  town  of  Ilavilah.  which  I  pre- 
sume still  exist.  Also  b\-  the  testimon\-  of  many  i)eople 
still  living. 

Such  were  the  tricks  I  )amc  hOrtune  j)la\ed  me  in  a 
period  of  a  little   longer  than   a  year. 

107 


The  Great  Diamond  Hoax 

I  was  literally  chased  from  absolute  poverty  into  the 
possession  of  nearly  a  million  dollars. 

I  discovered  a  great  mining  district  and  founded  a 
thriving  town. 

And  if  the  matter  of  paternity  is  ever  brought  u\^  in 
court,  it  will  probably  be  proved  to  the  satisfaction  of  a 
iurv  that  I  am  the  father  of  Kern  countv. 


108 


CHAPTER  XIV. 

Decade  Between  1860  and  70,  Next  to  the  Gold 
Age,  One  of  the  Most  Stirring  Times  in  History 
OF  State. 

Realization  Had  Conic  '/'hat  Mineral  Piiclics  I'onncd 
Smallest  Part  of  Resources;  Outlook   Was  Bright. 

Late  in  the  suminer  of  1863.  I  took  u])  my  residence 
in  San  Francisco.  The  war  was  over,  the  conntry  set- 
tling down  after  the  intoxication  of  a  terrific  strnggle. 
Bnt  one  fever  was  only  followed  Ijy  another,  so  far  as 
I  was  concerned.  I  was  barely  25,  bnt  far  older  than 
my  years.  In  fact,  I  never  had  any  youth  at  all.  I""rom 
the  time  when  I  ran  away  from  college  to  join  Walker's 
expedition  against  Nicaragua,  I  was  called  on  to  meet 
problems  that  required  a  man's  decision,  and  so  became 
one,  long  ahead  of  time.  I'ut  I  was  brimful  of  a  rest- 
less ambition  to  make  my  mark — to  become  one  of  the 
great  central  figures  in  working  out  the  destiny  of  tlie 
Pacifi[c  Coast. 

Those  w'ere  stirring  limes,  indeed.  Few  seem  to 
understand  that  the  decade  between  1860  and  1870  was, 
next  to  the  gold  age  of  the  '50's.  the  most  important  in 
the  history  of  California.  It  was  the  period  of  transi- 
tion from  the  fierce  exploitation  of  the  ])ioneers  who 
looked  only  on  the  region  as  a  thing  to  be  despoiled  of 
its   treasures  and   to  be  abandoned.      It   saw   the   silent 

109 


The  Great  Diamond  Hoax 

valleys  changed  lo  broad  oceans  of  waving-  grain.  it 
saw  the  foothills  crowned  witli  tlirifty  vineyards,  saw 
the  sure  foundations  laid  of  a  great  fruit  industry,  saw 
the  beginning  of  systematic  irrigation,  it  saw  the  port 
of  San  h'rancisco  crowded  with  masts  oi  vessels  to  carr}- 
its  new-found  wealth  to  distant  lands,  saw  a  mighty 
foreign  commerce  develop,  saw  the  treasures  of  the 
Comstock  Lode  unlocked,  saw  a  railroad  stretch  from 
the  Atlantic  to  the  Pacific.  .\nd  men  arose  to  meet  the 
new  conditions.  A  s])lendi(l  line  of  merchants  seized  the 
opportunities  of  trade.  Isaac  Friedlander  opened  the 
markets  of  England  for  our  wheat.  Macondray  ISroth- 
ers  built  up  great  business  interests  in  the  Orient.  The 
trade  mark  of  William  T.  Coleman  &  Company  was  a 
guaranty  of  their  goods  throughout  the  civilized  world. 
These  names  are  only  typical  of  many.  A  new  race  of 
mighty  miners  developed,  men  like  George  Hearst,  J.  B. 
Haggin,  Lloyd  Tevis,  Alvinza  Hayward.  G.  \\\  Gray- 
son and  others,  wdiose  activities  extended  to  ITah, 
Nevada,  Arizona,  JMontana  and  to  distant  Mexico,  jiour- 
ing  a   fresh   river  of  gold  and   silver   into  California. 

The  drift  of  population  of  the  growing  city  also 
changed  and  the  westward  luovement  began,  which  will 
only  be  bounded  by  the  ocean. 

In  sliort.  nearly  all  we  have  in  Northern  California 
to-day  in  the  way  of  industries  and  enterprise  can  trace 
the  starting  point  to  that  age. 

It  was  an  intense,  booming,  hopeful  decade,  a  ])eriod 
of  great  events  and  great  men.  when  everyone  at  last 
realized  that  gold  was  the  smallest  ])art  of  the  State's 
resources   and   the   outlook   as  broad   as    the   horizon    of 

iin 


Decade  Between  1860  and  '70 

niidoccan.  1  do  not  \\i>li  to  intcrnipl  the  narrative  to 
(lip  into  general  lii>t()rv.  l)nl  it  nia\-  interest  the  reader 
to  have  a  i^linipsc,  as  we  joj>"  alont;',  of  real  thintj;s  and 
the  live  peoi)le  of  what  T  niav  be  pardoned  for  eallini; 
the  old  hut   i-eeent  times. 

All  old  Califoniians  ean  reeollect  the  now  faded  i^lory 
of  Montgomery  street.  Stretehing-  barely  from  the  foot 
of  Telet^rapli  Mill,  .at  Jackson  street,  nine  blocks,  to  a 
full  stop  at  Market  street,  it  was  really  the  whole  town. 
Durins^  the  busy  hours  of  the  (hi\  von  could  meet  there 
every  man  worth  knowini^"  in  .San  iM-ancisco.  and  in  the 
afternoon,  every  woman  with  a  jM'etty  face  or  a  hand- 
some g'own  to  show.  This  gave  a  wonderful  facilitx  for 
acquaintance  antl  general  good-fellowshi]).  l"Aer\hod\- 
knew  everybody.  That  was  what  made  the  old  ."-^an 
Francisco  the  most  charming  and  fascinating  cit\-  in  the 
world  from  a  social  standpoint.  It  was  not  alone  the 
most  brilliant  society  I  ever  encountered  in  an  experi- 
ence that  has  covered  most  of  the  world,  but  there  was 
a  freedom  and  heartiness  in  general  intercourse  that 
could  onlv  be  e.\i)lained  by  the  conditions  under  which 
people  lived. 

Into  those  nine  blocks,  and,  to  a  less  extent,  into  one 
block  on  either  side  of  some  of  the  intersecting-  streets 
like  California,  Pine  and  fUish,  a  vast  Imsiness  was 
huddled  no  less  remarkable  for  its  vast  extent  than  for 
its  cosmopolitan,  or  rather  heterogeneous  character. 
Ranks,  commercial  houses,  slock  exchanges,  brokers' 
ofifices,  courts,  public  buildings.,  the  loading-  hotels,  retail 
stores,  public  libraries,  theaters,  music  halls,  the  two 
great   social   clubs,   nearly   all    the   lawyers    in    town,    the 

111 


The  Great  Diamond  Hoax 

leading-  doctors  and  probably  the  finest  saloons  in  the 
world,  were  mixed  up  inextricably  like  a  huge  human 
menagerie  broke  loose.  Not  to  be  on  Montgomery 
street,  or  within  half  a  block  of  it,  was  to  be  classed  as 
a  business,  professional  or  social  pariah. 

Of  course  real  estate  values  soared  skyward.  It  was 
hard  to  estimate  what  Montgomery  street  frontage  was 
really  worth,  but  there  were  actual  transactions  as  high 
as  $6,000  a  front  foot,  nearly  as  high  as  the  present  sell- 
ing price  of  choice  realty  on  Market  street.  Rents  like- 
wise were  enormous.  Considering  how  little  the  land- 
lord gave  in  the  way  of  conveniences  to  his  tenants, 
these  rents  were  much  higher  than  they  are  today. 

To  relieve  this  tremendous  congestion  was  one  of  the 
problems  of  San  Francisco  in  the  60's.  No  one  had 
the  perspective  to  forecast  cable  and  trolley  cars  climbing 
all  kinds  of  grades  and  peopling  the  hills  with  homes. 
All  we  could  see  was  an  extension  south  and  for  that 
purpose  the  city  was  badly  laid  out. 

The  battle  cry  in  the  early  60's  was  "Montgomery 
street  straight."  The  all  but  universal  wish  was  to  run 
the  great  street,  broadened  to  a  wide  avenue,  in  a  direct 
line  to  Connecticut  street,  far  to  the  south.  Tremendous 
efforts  were  made  to  carry  through  this  project  in  a 
peaceful  way.  Several  times  it  was  near  accomplish- 
ment, but  just  as  often  fell  through,  owing  to  some 
recalcitrant  property  owner.  The  main  obstacle  was  the 
large  block  of  land  on  Market  street  where  the  Palace 
Hotel  now  stands.  This  was  owned  by  the  Catholic 
Church  and  had  been  reserved  for  the  construction 
thereon  of  a  great  religious  edifice. 

112 


Decade  Bet\veen  i860  and  '70 

As  soon  as  I  got  my  bearings  in  San  Francisco,  I  saw 
at  once  what  a  vital  question  was  involved  and  what  a 
grand  opportunity  was  there  to  win  not  alone  fortune, 
but  fame.  I  carefully  surveyed  the  situation  from  every 
standpoint  and  finally  hit  upon  a  scheme  which  would 
carry  out  the  original  design  of  "Montgomery  street 
straight,"  and  avoid  the  opposition  hitherto  evolved. 
As  what  follows  forms  one  of  the  interesting  bits  of 
San  Francisco's  history,  hitherto  untold,  and  the  city's 
present  status  was  greatly  influenced  by  my  plans, 
which,  however,  were  only  carried  out  in  part.  I  will 
give  an  outline  of  one  of  the  largest  real  estate  trans- 
actions, of  a  far  reaching  character,  ever  conceived  and 
partly  completed  in  the  history  of  San   Francisco. 


113 


CHAPTER  XV. 

First    Spi-:c  i'laior    io    Fkiure   1^ii.\i-    AlARKirr    Street 
Had    Future    Buys    Several    Iiioki-:    Lois    for    a 

PlT'lAXCE. 

EartJujuakc   Plays   Inif'urtaiif   Part   in    Bii;;   Deal;    lliiiid 
Citirjcii  Srlls  Out  in   Hurry  and  Loses  $^y\ooo. 

In  the  early  TjO's  no  one  thoui^ht  of  Market  street  ex- 
cept as  a  disfigurement  to  the  city  and  a  l)road  impedi- 
ment to  its  progress.  It  hegan  ahnost  nowhere  at  an 
unfrequented  section  of  the  waterfront,  where  the  (hdl- 
ness  was  reheved  only  by  the  arrival  and  departure  four 
or  five  times  a  day  of  a  ferryboat  ow'ued  by  Charles 
Alinturn,  which  transj^orted  a  few  straggling'  ])assengers 
between  San  Francisco  and  the  small  village  of  Oakland.' 
across  the  bay.  If  I  recollect  aright,  the  fare  was  .^0 
cents  each  wa\'.  It  teriuinated — so  far  as  traffic  and 
settlement  were  concerned — exactly  nowlierc.  in  the 
desolate  sand  hills  beyond  where  the  Flood  I'.uilding 
now  stands.  The  "gore"  streets,  like  Post,  Geary  and 
O'Farrell,  that  now  ])()ur  a  human  tide  into  the  cit\"s 
big  artery,  were  settled  only  for  a  few  blocks  westward  ; 
beyond  that  there  was  solitude.  Tlu'  roadway  of  Market 
street  was  an  aljomination  even  in  tlie  old  da\s  ])efore 
"good  roads"  became  a  slogan.  The  sidewalks,  if  anv, 
were  wooden,  and  mighty  poor  at   that. 

I    was   about    tlie    first    real   estate   investor,   to    which 

114 


Buys  Choice  Lots  for  a  Pittance 

business  I  turufd  ni\-  atU'iiticm,  wIki  rcalizi'il  in  a  >()rt  ol 
vag"ne  way  thai  Market  street  had  a  futui'e.  I  had  a 
shrewd  idea  tliat  the  insistent  phm  Idr  "  M(»nt,L;<)niery 
straight."  on  whicli  so  nian\-  l)ased  their  hopes,  was 
doomed  to  (hsa])i)ointnienl.  l)nt  as  I  said  in  tlu'  last 
chapter,  I  saw  a  way  out  of  the  (hleninia.  With  this 
in  view.  I  began  to  pick  up  Market  street  frontai;e  from 
l^^irst  street  west  till  I  owned  800  feet.  I  also  boni^ht 
the  Sutter-street  gore,  where  the  skyscrajjcr  has  since 
gone  u]),  at  a  ])ul)lic  auction,  paying  $86,000  for  the 
same  in  hard  cash,  which   was  considered  a  to])  ])rice. 

Meanwhile  T  was  quietly  buying  a  solid  block  of  land 
straight  through  from  Howard  street  to  Market.  It  was 
broad  enough  to  allow  a  wide  street  to  be  laid  out  in  a 
line  directly  opposite  to  the  ending  of  Montgomery,  and 
thus  change  so  many  backyards  into  frontages  on  a  fine 
thoroughfare — an  extension  of  the  city's  crowded  mart. 
T  wasn't  a  prophet  or  the  son  of  a  prophet,  Imt  the 
enterprise  looked  good.  Not  only  that,  but  it  seemed 
certain  to  me  that  the  extension  of  Montgomery  street. 
once  begun,  either  "straight"  or  at  an  angle,  would  be 
pushed  ahead  by  the  force  of  public  opinion  to  its  proper 
terminal,  the  waterfront  of  the  bay. 

Afost  of  this  immense  property,  outside  of  the  Sutter- 
street  gore,  was  gathered  in  at  prices  so  ])itifnll\'  small 
that  they  would  test  the  credulity  of  the  reader,  l^xcej^t- 
ing  one  other  piece  of  property,  the  total  investment  was 
less  than  $500,000.  and  the  wretched  buildings  on  it 
yielded  a  net  income  of  lj/>  per  cent.  ])er  month  on  this 
amount.  However,  this  was  looked  on  as  a  \er\  i)oor 
return  in  those  days  when  2^2  per  cent,  per  month,  com- 

115 


The  Great  Diamond  Hoax 

pounded  with  the  regularity  of  fate,  could  be  obtained 
on  well-secured  loans.  The  money  market  was  con- 
sidered easy  when  borrowers  could  be  accommodated  on 
those  terms.  It  all  seems  like  some  Monte  Cristo  story, 
lint  let  nic  tell  the  young,  ambitious  reader  that  there 
are  just  as  splendid  opportunities  staring  him  in  the 
face  to-day  just  waiting  to  be  taken  into  camp.  The 
region  around  the  Bay  of  San  Francisco  is  destined, 
beyond  a  doubt,  to  become  one  of  the  greatest  world 
centers  of  population,  commerce,  business  and  produc- 
tion. The  possibilities  have  barely  been  touched.  Take 
it  as  the  judgment  of  a  close  observer,  with  wide  experi- 
ence, that  now  is  the  time  to  get  on  board — using,  of 
course,  sound  common  sense  and  intelligent  foresight. 
If  I  were  25  instead  of  76,  I  would  like  to  give  the 
public  an  object  lesson  of  how  to  make  money. 

But  I  was  a  long-  time  securing  the  Market-street 
frontage  necessary  to  carry  out  my  plans.  How  I  finally 
succeeded  is  quite  an  incident,  well  \vorth  recalling,  al- 
though it  is  ahead  of  my  story. 

On  the  south  side  of  Market  street,  exactly  opposite 
the  terminus  of  Montgomery  street,  stood  a  vacant  fifty- 
vara  lot,  owned  by  a  well-known  old  pioneer  by  the 
name  of  Selim  Woodworth.  I  had  bought  sixty  feet 
adjoining  the  church  property  where  the  Palace  Hotel 
now^  corners.  The  Selim  Woodworth  lot  was  next  to 
that.  Xow  the  owner  had  a  very  hard  head  and  a  rather 
top-heavv  idea  of  the  value  of  anything  he  possessed. 
Ofif  and  on  I  was  negotiating-  with  Woodworth  for  more 
than  a  year  and  a  half,  sometimes  ])ersonally,  some- 
times through  a  broker,  but  always  ran  abruj^tly  against 

116 


Buys  Choice  Lots  for  a  Pittance 

the  same  proposition.  "If  you  want  that  property  it  will 
cost  you  precisely  half  a  million.  There  is  nothing 
further  to  be  said  on  the  subject.  Let's  turn  the  con- 
versation to  something  else."  Nobody  could  have  been 
more  courteous  or  more  firm. 

I  had  been  bumping  up  against  this  brick  wall  so  often 
and  was  so  helpless  to  carry  out  my  plans  without  the 
land  in  question,  that  I  was  on  the  very  point  of  paying 
what  was  then  a  price  out  of  all  reason  or  proportion 
to  existing  values,  when  something  happened  to  change 
Mr.  Woodworth's  estimates  in  a  way  quite  novel  and 
picturesque,  from  a  business  standpoint. 

The  earthquake  of  1868  wasn't  much  alongside  of  its 
successor  of  1906,  nevertheless,  it  was  quite  a  jolt. 
Some  rattletrap  buildings  collapsed,  many  others  were 
cracked  from  roof  to  foundation,  an  immense  number  of 
chimneys  were  overthrown  and  a  few  people  killed.  The 
most  disquieting  feature  was  that  the  earthquake  didn't 
know  when  to  stop.  There  was  the  first  big  damaging 
shock,  but  after  that  every  ten  minutes  the  earth  gave  a 
jolt  quite  hard  enough  to  send  multitudes  scurrying  into 
the  streets.  There  was  not  an  interval  long  enough  to 
allow  the  average  man  to  gather  his  wits.  After  a  night 
of  agony  and  suspense,  most  people  were  weak  as  kit- 
tens and  speechless. 

I  went  down  town  in  the  morning  after  the  quake 
from  my  home  on  Rincon  Hill.  I  really  was  not  much 
disturbed  after  the  first  lurch,  for  I  had  read  somewhere 
that  the  minor  tremors  succeeding  the  initial  shock 
never  need  be  apprehended.  One  of  the  first  men  I  met 
in  the  business  section  was  Selim  Woodworth.     He  was 

117 


The  Great  DiaiiKMid  Hoax 

carrvino"  a  handbag"  and  his  face  showed  evidence  of 
mental  strain.     1   asked  liini  wlTcre  he  was  going. 

"Where  am  I  going?"'  said  W'oodworth.  "What  a 
question  to  ask  I  Why.  T  am  getting  out  of  here  before 
the  earth  swallows  me  u]\     When  do  you  leave?" 

I  told  him  I  didn't  intend  to  leave  at  all  whereat  a 
look  of  deep  craft  came  over  Woodworth's  face.  "Look 
here,  Harpending,"  he  said,  "how  about  that  Market 
street  lot?     Do  you  still   want  to  buy?" 

T  laughed  as  if  in  scorn.  "\Mio  on  earth,"  T  said, 
"would  want  to  buy  a  lot  that  may  be  a  hole  in  the 
ground  In-  night,  reaching  through  to  China.  Besides, 
vou  have  always  been  so  unreasonable  that  no  human 
being  could  deal  with  you." 

"\A'cll.  make  me  an  offer,  anyway."  he  replied,  "you 
will  find  mc  reasonal)le  enough." 

T  pondered  for  a  moment  before  I  answered,  "Well, 
I  was  thinking  of  offering  you  $150,000,"  I  said,  "but 
that's  too  much.  Still,  just  to  help  you  out  in  a 
neighborly  way  T  might  strain  a  ])oint  and  give  you — " 

T  never  had  time  to  finish  the  sentence.  "Oh,  for 
riod's  sake."  yelled  Wofxlworth,  "don't  screw  me  down 
at  a  time  like  this.  Make  it  $130,000  and  we'll  close 
the  bargain  here." 

We  shook  hands  on  the  spot.  Together  we  went  to 
the  Bank  of  California,  where  a  formal  contract  for  a 
deed  to  the  property  was  drawn,  and  this,  at  Mr.  Wood- 
wf)rth's  request,  was  guaranteed  l)y  a  liigh  official  at  the 
bank,  f  deposited  $150,000  in  escrow.  Tn  due  season 
the   deeil    was   sent   on    to   Mr.    Woodworth    in    Euro])e, 

118 


Buys  Choice  Lots  for  a  Pittance 

was  returned  properly  executed  and  the  famous  50  vara 
Tot  passed  into  my  hands. 

This  is  the  veritable  story  of  how  1  acquired  the 
frontage  on  Market  street  which  enabled  me  to  open 
New  Montgomery  street  through  my  property  to  Howard. 
I  was  certain  it  would  soon  be  extended  to  the  bay  and 
solve  the  jiroblem  of  the  60's — "JVIontgomery  South." 
At  the  Market  street  corners  of  the  street  I  opened,  the 
Palace  Hotel  and  the  Merchants'  Bank,  two  of  the  finest 
buildings   in  San   I'>ancisco,  now   stand. 

I  made  Xew  Montgomery  street,  as  it  stands  to-day, 
a  free  gift  to  the  city  of  San  Francisco,  and  it  must 
remain  a  |)ermanent  record  of  my  existence.  I  may 
add  that  1  had  to  scatter  numerous  shekels  among  the 
"boys"  Ix'fore  the  gift  v.'as  finally  accepted. 

Also,  the  earthquake  literally  shook  $350,000  out  of 
Selim  Woodworth,  which  he  would  have  received  other- 
wise in  a  few  days. 


119 


CHAPTER  XVI. 

Montgomery  South  Deal  Comes  to  Notice  of  Ral- 
ston, Who  Buys  Quarter  Interest  in  Real  Estate 
Project. 

Long-  before  the  events  narrated  in  the  last  chapter 
a  most  important  person  became  a  character  in  this 
narrative.  In  one  way  or  another,  I  had  l:)ecome  qnite 
a  fignre  in  the  bnsiness  world  of  San  Francisco ;  I  took 
a  flyer  at  several  things  in  a  speculative  line,  always 
made  money  at  my  ventures,  and  was  generally  looked 
on  as  what  we  now  call  "a  comer." 

But  it  was  entirely  because  of  my  large  and  pecu- 
liar real  estate  investments  that  I  attracted  the  notice 
of  the  great  central  figure  of  California  of  that  day 
— one  who  always  wished  to  be  associated  with  any 
of  the  large  movements  of  his  time. 

Almost  from  the  date  when  I  first  had  luoney  enough 
to  make  it  inconvenient  to  carry  it  on  my  person  I  kept 
my  account  at  the  Pacific  Bank,  of  which  Governor 
Burnett  was  president.  But  I  had  watched  the  as- 
cendant star  of  William  C.  Ralston  as  it  put  out  of 
sight  all  the  lesser  luminaries.  I  had  a  young  man's 
admiration  for  his  dash,  energy  and  success  and  I 
was  pleased  when  I  received  a  letter  from  the  gentle- 
man, saying-  that  he  would  like  to  see  me,  at  my  con- 
venience, at  the  Bank  of  California. 

We  met  by  appointment.      I    had   known   Mr.  Ralston 

120 


Deal  Comes  to  Notice  of  Ralston 

before  in  a  purely  casual  way.  This  was  the  first 
time  we  had  touched  in  business.  He  had  a  swift,  off- 
hand fashion  of  saying  pleasant  things — not  flatteries, 
but  things  that  put  a  man  in  good  humor  with  him- 
self ;  and  thus  he  spoke  to  me  of  his  desire  to  be 
abreast  with  the  active  men  of  the  city,  to  be  able  to 
aid  and  co-operate  with  them.  Then  he  had  a  word 
to  say  about  my  real  estate  ventures  and  in  a  very 
natural  course  led  up  to  a  general  conversation  on  the 
subject. 

Mr.  Ralston's  manner  entirely  won  my  confidence. 
Besides,  we  had  a  direct  way  of  doing  business  then, 
quite  different  from  the  dark-lantern  methods  of  to- 
day. I  simply  laid  down  my  cards  on  the  table,  face 
up.  I  told  Mr.  Ralston  exactly  what  I  had  in  mind ; 
that  my  purpose  was  to  solve  the  great  problem  of 
"Montgomery  South"  in  a  new  way ;  that  I  considered 
it  a  matter  of  vast  importance  for  the  city's  future  and 
one  certain  to  bring  fortune  to  the  successful  promoter. 

Mr.  Ralston  listened  with  deep  attention,  with  an 
occasional  word  or  nod  of  approval.  When  I  con- 
cluded he  leaned  back  in  his  chair  in  a  meditative  way 
and  thought  a  minute.  "It  looks  like  a  noble  game," 
he  said  at  length.  "Now,  how  would  you  like  me  for 
a  partner?" 

I  was  just  a  bit  astonished  at  the  proposition,  but 
I  was  gratified  that  the  financial  autocrat  of  the  Pa- 
cific Coast  wanted  to  climb  into  my  band  wagon.  The 
arrangements  were  made  with  less  "jockeying"  than 
now  takes  place  over  a  thousand-dollar  transaction.  I 
made   a   complete   statement   of  my   investments,   which 

121 


The  Great  Diamond  Hoax 

]\Ii".  Ralst()n  accepte-d.  and  made  me  an  offer  based 
on  cost,  ])his  a  very  handsome  j)rofit,  for  a  (|uarter 
interest.  I  accei)ted  also  in  an  offhand  way  and  deeds 
passed  to  correspond  covering-  all  m\-  real  estate  in- 
volved in  "Montg^omery  South."  It  was  understood 
that  we  would  stand  together  to  push  the  new  street 
through  to  the  ba\'.  and  that  in  this  project  I  should 
have  the  practically  unlimited  supi)ort  of  the  liank 
of  California.  (Jur  holdings  were  merged  into  a  cor- 
poration, known  as  the  Montgomery  Street  Land  Com- 
pany. 

Thus  I  became  associated  with  this  strange  char- 
acter, who  has  been  dead  almost  forty  years,  yet  whose 
name  is  still  a  household  word  to  thousands  and  bids 
fair  to  be  remembered  long  after  those  who  pose  as 
the  truly  great  are  asleep  in  forgotten  tombs. 

I  spoke  of  Ralston  as  a  "strange"  character.  But 
the  adjective  doesn't  fit  the  case  at  all.  There  was 
just  one  Ralston  in  California.  Perhaps  his  counter- 
part never  lived  before.  It  would  be  far  beyond  my 
powers  to  draw  a  sketch  of  a  man  so  many-sided,  but 
here  and  there  some  traits  cropped  out  so  prominent 
that  they  could  scarcely  miss  the  observation  of  a  child. 

Ralston  had  a  marvelous  head  for  business.  The 
most  difficult  jjroblems  of  finance  were  as  simjile  to 
him  as  the  alphabet  and  his  mind  cut  through  all  per- 
plexities and  obstructions  straight  to  the  truth.  Had  he 
possessed  a  few  less  red  corpuscles  in  his  blood — been  a 
plain,  down-right  financier,  T  am  certain  that  he  would 
have  grown  beyond  the  narrow  environment  of  the 
Pacific    Coast    and    become    one    of    the    world's    money 

122 


WM.    C.    RALSTON 

President   of    Bank   of    California,   the 

first    dupe    in    diamond   fraud 


Deal  Comes  to  Notice  of  Ralston 

kings.  But  he  had  an  odd  supplement  to  the  cold- 
blooded faculty  of  making  money,  a  sort  of  richly 
Oriental  imagination  that  looked  far  beyond  the  mere 
acquisition  of  a  pile  of  cash. 

For  one  thing,  he  had  a  passionate,  almost  pathetic 
love  for  California.  He  wanted  to  see  his  State  and  city 
great,  prosperous,  progressive,  conspicuous  throughout 
the  world  for  enterprise  and  big  things.  I  think  it 
was  this  imagination,  this  ambition,  that  kept  hurrying 
him  into  one  big  undertaking  after  another,  many  of 
which  were  way  ahead  of  time.  While  he  was  stack- 
ing up  money  in  one  direction,  with  the  skill  of  a  great 
native-born  financier,  it  was  leaking  out  in  various  other 
ways  for  rolling  mills,  vast  hotels,  watch  factories, 
woolen  mills,  furniture  factories,  and  what  not.  It  was 
only  an  ambition  to  say  that  San  Francisco  had  the 
grandest  and  largest  hostelry  in  the  world  that  prompted 
him  to  build  the  Palace  Hotel.  And  so  on  down  the 
line.  He  tried  to  do  everything,  and,  like  others,  failed 
in  the  end. 

With  all  of  his  tremendous  business  activities,  I  could 
never  think  of  Ralston  except  as  a  big  over-grown  boy. 
He  had  an  elasticity  and  buoyancy  of  spirits  very  sel- 
dom seen  beyond  the  teens  and  a  youth's  eagerness  in 
the  pursuit  of  pleasure.  Nothing  seemed  to  disturb  his 
imperturbable  good  humor.  He  was  at  once  the  best 
winner  or  loser  in  the  world — could  pick  up  or  drop  a 
million  with  equal  gaiety  and  nonchalance.  He  always 
smiled  in  conversation,  but  in  moments  of  repose  his 
features  settled  into  an  expression  that  was  half  thought- 
ful,  half   sad. 

125 


The  Great  Diamond  Hoax 

Where  he  shone  most  ]:)erhaps  was  as  a  "mixer."  He 
had  wonderful  manners,  frank,  cordial,  magnetic,  and 
handed  out  the  same  ciuah'ty  to  everyone  aUke.  He 
avoided,  either  by  design  or  inclination,  all  the  pom- 
posity and  circumstance  of  greatness,  even  went  out 
of  his  way  to  be  extra  gracious  to  those  who  seemed 
a  trifle  embarrassed  in  his  presence.  In  this  way  he 
endeared  liimself  to  a  small  army  of  young  men  and 
to  some  of  the  still  more  youthful  highbinders  who 
used  to  visit  the  Bank  of  California  and  stand  up  the 
smiling  financier  for  baseball  club  uniforms  and  other 
all-important  incidentials  upon  which  the  fame  and  glory 
of  California  hung.  As  to  the  industrial  classes,  they 
simply  worshiped  Ralston.  He  was  their  constant  pro- 
vider, philosopher  and  friend.  It  seemed  to  me  that 
he  knew  half  of  the  working  population  by  their  first 
name,  and  he  was  known  among  them  familiarly  and 
affectionately  as  "Hill"  Ralston.  It  is  a  sad  commen- 
tary on  human  nature  that  in  the  hour  of  his  misfor- 
tune the  men  he  had  enriched  took  to  the  tall  timber. 
Only  his  humble  friends  proved  true. 

This  only  gives  the  faintest  glimpse  of  Ralston,  b^or 
years  I  was  his  intimate  associate.  He  was  a  man  of 
many  friends  and  many  business  connections,  but  I 
think  he  gave  his  entire  confidence  to  only  two  men, 
■Maurice  Dore  and  myself.  In  all  our  relations  T  al- 
ways found  him  ]umctiliously  honoral)le  and  truthful. 
and  though  llie  acf|uaintance  was  a  costly  one  to  me. 
I  liiild  his  memory  in  affectionate  remembrance — as  I 
did  when   I   last  saw  him  forty  years  ago. 

.\nd    even    admitting    all    that    his    traducers    charge, 

126 


Deal  Comes  to  Notice  of  Ralston 

after  death  had  silenced  his  voice  forever,  I  would  still 
say  that  he  deserved  a  statue  in  Golden  Gate  Park  as 
the  most  effective  friend  the  State  of  California  ever 
had.  But  hefore  I  close  this  story  I  hope  to  make  it 
])lain  that  a  cruel  wrong  was  done  his  memory  and  let 
the  truth  come  out  at  last. 


127 


CHAPTER  XVII. 

Sharon,  Too,  Becomes  Associate  of  Famous  Pio- 
neer; This  Chapter  Tells  How  Great  Panic  Was 
Averted, 

Ralston   Lays  Foundation  for  Huge  Fortune  of  D.   0. 
Mills  by  Making  Him  a  Bank  President 

Ralston  had  two  business  associates — I  might  almost 
call  them  familiars — William  Sharon  and  D.  O.  Mills. 
D.  O.  Mills  was  a  man  of  some  fortune,  worth  perhaps 
half  a  million  dollars.  He  was  about  to  leave  for  the 
East  to  settle  down  somewhere  under  his  own  vine 
and  fig  tree,  when  Ralston  took  him  up.  The  latter 
was  just  organizing  the  Bank  of  California,  had  no 
ambition  for  titular  dignities,  and  offered  Mills  the 
place  of  president.  He  promised  that  the  job  would 
be  a  sinecure — that  he  would  do  all  the  work.  Mills 
accepted.  That  was  the  foundation  of  liis  huge  for- 
tune. But  he  was  a  mighty  cautious  speculator  in  those 
days.  He  tried  his  hand  at  a  number  of  ventures,  some- 
time invested  large  sums,  l)ut  always  refjuired  a  guar- 
anty against  loss.  Strangely  enough,  this  used  to  be 
given  him  often,  because  of  the  conservatism  associated 
with  his  name.  That,  however,  did  not  last  long.  He 
became  a  bold,  ambitious,  original  operator  on  his  own 
account.     He  had  fine  personal  habits,  but  was  just  the 

128 


D.    O.     MILLS 

First    President    Banl<   of    California, 

a  financier  of   national   repute 

Sharon  Associate  of  Famous  Pioneer 

opposite  of  Ralston — unemotional,  cool-headed  and  aus- 
tere. 

Sharon  was  quite  a  different  character.  He  was  from 
the  same  part  of  the  Northwest  as  J.  D.  Fry,  an  uncle 
of  Mrs.  Ralston,  and  so  received  a  favorable  introduc- 
tion to  the  famous  financier.  Ralston  sent  Sharon  to 
Virginia  City  during  the  early  flush  times  as  an  agent 
for  his  mining  interests,  and  when  the  IJank  of  Cali- 
fornia was  organized  and  a  branch  located  on  tlic 
Comstock  Lode,  Sharon  became  manager,  a  position  of 
great  prominence  and  power.  He  was  a  daring,  s]iec- 
tacular  plunger,  though  a  very  shrewd  one,  made  big 
money  from  the  outset  and  with  his  general  fore-knowl- 
edge of  conditions  really  took  no  chance  at  all  on  great 
stock  market  deals.  With  unexampled  rapidity,  he  ac- 
cumulated a  fortune  of  millions.  Having  no  pet  hob- 
bies to  interfere  with  accumulating  money,  before  the 
'60s  were  over  both  Mills  and  Sharon  probably  pos- 
sessed larger  fortunes  than  their  chief. 

As  I  have  said  Sharon's  personality  was  very  differ- 
ent from  that  of  Mills  in  many  ways.  He  had  some 
habits  that  an  anchorite  might  not  approve.  Among 
other  things  he  was  devoted  to  the  great  national  pas- 
time— draw-poker.  Many  legends  of  his  prowess,  of 
his  bewildering  bluffs  and  high-class  technique  were 
long  fragrant  memories  of  the  Comstock  Lode.  It  is 
related  that  a  friend  of  Ralston  with  a  moral  turn 
warned  him  that  his  agent  at  Virginia  was  a  notorious, 
abandoned  and  dissolute  poker  player.  The  banker  lis- 
tened with  absorbed  interest.  "Does  he  win  or  lose?" 
he  asked. 

131 


The  Great  Diamond  Hoax 

"j\Iy  information,"  said  the  informer,  "is  that  he  al- 
most always  wins." 

"Good,"  said  Ralston.  "He's  the  very  man  I  want." 
The  three  were  associated  in  many  enterprises  of  the 
first  magnitude.  They  had  combined  resources,  speak- 
ing very  conservatively,  of  not  less  than  thirty-five  mil- 
lions, which  is  a  big  bunch  of  money  even  today.  They 
formed  an  irresistible  power  in  California,  until  the 
railroad  dynasty  succeeded  them.  Still  I  have  reason 
to  believe  that  Ralston  never  gave  these  associates  his 
full  confidence,  and  that  the  relation  became  irksome, 
if  not  oppressive. 

I  judge  the  former  from  an  unrecorded  incident  that 
ought  to  be  remembered  in  financial  history — an  inci- 
dent that  just  prevented  a  crisis  far  more  terrible  than 
that  of  1907. 

It  was  in  the  year  1869.  Ralston  had  loaned  the 
railroad  people  some  months  before  $3,000,000,  with 
which  they  pushed  their  line  to  Ogden,  adding  a  hun- 
dred miles  to  the  Central  Pacific  in  its  cross-country 
race  with  the  Union  Pacific  for  mileage.  This  large 
sum  had  gone  out  of  the  State  absolutely.  Also  two 
millions  had  taken  wing  for  South  America  to  finance 
an  investment  there.  Things  were  already  a  trifle  tight 
when  in  July,  1869,  Jay  Gould's  famous  "gold  corner" 
raised  the  yellow  metal  to  a  huge  premium  and  the 
gold  coin  of  California  was  drained  eastward,  as 
■through  a  sieve.  The  banks  always  carried  a  large 
amount  of  gold  bars,  but  this  was  not  available  as  coin, 
for  the  mint  happened  to  be  shut  down  pending  a 
change   of  administration. 

132 


^      :^ 


>-*^\ 


WM.    SHARON 

A    leading    Comstock    figure, 

former   U.    S.   Senator 


Sharon  Associate  of  Famous  Pioneer 

The  situation  need  not  have  I)een  serious,  for  tucked 
away  in  the  United  States  sub-treasury  were  $14,000,- 
000  in  g'old  coin.  It  seemed  the  most  legitimate  trans- 
action in  the  worhl  to  deposit  gold  bars  in  the  Treasury 
and  carry  away  an  e(|ual  value  in  coin.  ]^)Ut  President 
Grant,  who  was  rather  new  on  the  job,  for  some  un- 
accountable reason  absolutely  refused  to  sanction  the 
transfer,  although  the  bankers  almost  burned  up  the 
wires  with  their  appeals.  An  uneasy  feeling  was  over 
the  town,  the  overcharged  atmosphere  of  panic,  apt  to 
break  loose  at  any  moment  into  a  resistless  storm. 

While  the  tension  was  at  its  height  I  called  at  the 
Bank  of  California  one  afternoon  and  was  ushered  into 
the  private  of^ce  of  Mr.  Ralston.  To  tell  the  truth,  I 
was  feeling  the  pinch  myself,  and  wanted  to  know  some- 
thing of  the  outlook. 

The  banker  said  I  was  just  the  man  he  wanted  to 
see.  'Tf  things  go  on  as  they  are,"  he  said,  "every 
bank  will  be  closed  by  tomorrow  afternoon.  Not  one 
of  us  can  stand  a  half  day's  run,  and  all  will  go  down 
in  a  heap.  Then  look  out  for  hell  in  general  to  break 
loose.  This  will  happen  if  I  don't  get  a  million  dol- 
lars in  coin  in  the  vaults  tonight.  But  I  intend  to  get 
it,  and  want  you  and  Maurice  Dore  to  help.  Be  at 
the  bank  at  1  o'clock  tonight,  and  put  on  an  old  suit 
of  clothes,  for  you  will  have  plenty  of  hard  work  to  do." 

Dore  and  myself  met  by  appointment  shortly  after 
midnight.  We  were  utterly  mystified.  Together  we 
tramped  through  the  deserted,  dimly  lighted  streets.  It 
seemed  just  like  old  times — the  time  we  boarded  the 
Chapman  to  become  privateers.     We  found  Ralston  at 

135 


The  Great  Diamond  Hoax 

till'  hank  with  one  of  its  trust}'  officials,  still  alive  and 
])roniinent  in  San  hrancisco.  The  financier  was  in  hig'h 
sjnrits,  but  counseled  caution.  We  walked  noiselessly 
to  the  United  States  Sub-'J'reasury,  then  located  on 
^ronti^omery  between  Sacramento  and  California  streets, 
where  the  vSelby  offices  afterward  stood.  A  dim  lii^-ht 
was  burning-  within.  Mr.  Ralston  asked  us  to  halt  a 
few  ])aces  from  the  entrance ;  then  to  our  great  sur- 
prise he  opened  the  door  of  the  Sub-Treasury,  without 
challenge  of  any  kind,  and  closed  it  after  him  as  he 
stepped  inside.  Presently  he  emerged  with  several  sacks 
of  coin.  "Take  that  to  the  bank,"  he  said.  "The  gentle- 
man there  wall  give  you  something'  to  bring  back." 

The  party  at  the  bank  received  the  cash,  tallied  it 
and  handed  us  gold  bars  for  the  same  value.  These 
we  to(jk  to  the  Sub-Treasury,  w'here  we  found  Mr. 
Ralston  smilingly  awaiting  us  with  a  new  cargo  of 
sacks  on  the  sidewalk.  We  turned  over  the  bars  and 
made  another   journe)'   to  the  bank. 

Thus,  at  dead  of  night,  ])assing  to  and  fro,  we  trans- 
ferred in  actual  weight,  between  the  Sub-Treasury  and 
the  bank  nearly  five  tons  of  gold.  We  did  not  get  quite 
as  much  as  Ralston  wanted,  before  the  light  began  to 
break.  Tt  was  a  heart-breaking  jolj  from  a  physical 
stand] )oint.  1  was  x'oung  and  athletic  and  stood  my 
end  of  it  in  good  sha])e.  Hut  Maurice  Dore  was  of 
sedentary  habit,  soft  as  mush,  and  he  was  on  the  verge 
of  collapse,  lie  was  nearly  chest  foundered  and  had 
a  sw'ayback  appearance  for  a  month.  During  all  this 
time,   not   a   person   i)assed   to    inlerru])t    us.      This    was 

136 


Sharon  Associate  of  Famous  l^ionccr 

douhtless  due  to  a  i)rearranL;vinciU  with  the  policeman 
on  the  beat. 

When  the  Rank  of  California  opened  the  next  morn- 
ing" a  rather  ominous  looking-  crowd  was  in  wailing'. 
Lines  began  to  form  Ijcliind  tlie  i)a\'ing  tellers'  windows. 
It  wasn't  a  "run,"  but  a  "near-run."  Ralston  appeared 
on  the  scene  and  looked  annoyed,  as  he  said.  "Why  are 
you  making"  so  many  of  our  customers  wait  on  a  busy 
day?  Put  more  tellers  on  the  windows  and  have  \-our 
coin  on  hand."  More  tellers  went  to  the  windows. 
Porters  brought  tray  after  tray  from  the  vaults.  It 
was  amazing  how  the  crowd  changed  their  minds  about 
wanting"  their  money  and  melted  away.  And  all  over 
the  troubled  city  the  rej^ort  sjiread  that  the  liauk  of 
California  had  coin  to  l)urn,  and  the  news  caused  a 
general  relief. 

Nevertheless,  a  serious  run  started  on  one  of  the  lead- 
ing banks.  Ralston  hurried  to  the  spot,  mounted  a 
dry  goods  box  and  addressed  the  crowd.  He  told  them 
they  were  doing  the  bank  and  the  city  a  great  injustice. 
Pie  declared  that  the  bank  was  absolutely  sound — which 
was  the  truth.  He  further  told  the  crowd  that  they  need 
not  wait  for  a  line-up.  Just  bring  their  books  to  the 
Hank  of  California  and  they  would  be  accommodated 
with  the  cash  there.  Again,  the  crowd  slunk  away 
abashed. 

Thus  a  tremendous  panic,  the  consequences  of  whicii 
might  have  been  world-wide,  was  averted  by  a  bold 
front,  a  nervy  bluff  backed  by  a  million  in  cash.  Three 
days  later.  President  (irant  reversed  himself  and  al- 
lowed   gold    to   be    exchanged    at    the    .Sub-Treasury    for 

137 


The  Great  Diamond  Hoax 

cash,  which  settled  all  anxiety.  This  was  liroiii^ht  about 
through  the  agency  of  Jesse  Selignnan,  the  New  ^'ork 
banker.  who  gave  the  President  a  banquet  and  then 
showed   him   his  mistake. 

lUit  neither  Mills  nor  Sharon,  who  were  leading  offi- 
cers of  the  bank,  ever  knew  how  Ralston  gathered  in 
nearly  a  million  dollars  after  banking  hours  that  day. 
All  the  satisfaction  they  ever  got  was  that  a  kind  friend 
had   come   to  the  bank's   assistance. 


138 


CHAPTER    XVIII. 

"Big  Four"  iNTRuviiNKs  and  Sets  Up  Obstacles; 
Ralston  Acts  as  Mkdlator  and  Is  IkAdly  Gold- 
Bricked. 

Railroad    ^fadncss    Results    in    the    Narrator    Scciirint^ 
Franchise  for  Line  Front  Sausalito   io  Humboldt. 

Way  back  in  1868,  the  Leg-islatnre  passed  a  bill  giv- 
ing" a  franchise  to  a  cor])oration  organized  under  the 
name  of  the  San  h>ancisco  &  Humboldt  Bay  Railroad 
Company,  to  construct  a  railroad  from  an  indefinite 
point  on  the  bay  of  San  Francisco  to  Eureka,  in  Hum- 
boldt county.  The  franchise  was  coupled  with  a  ])ro- 
vision  that  the  electors  of  the  counties  through  which  it 
passed  should  be  authorized  to  vote  a  subsidy  in  bonds 
of  $5,000  per  mile,  payable  as  every  section  of  25  miles 
was  completed.  That  was  about  enough  to  pay  for 
the  rails.  The  franchise  was  later  extended  to  the 
waterfront  of  Sausalito,  but  that  was  surrendered  to  the 
Sausalito  Land  and  Ferry  Company. 

The  franchise  was  held  by  Fred  McCrellish  of  the 
Alta  ;  j.  V.  McCauley,  a  well  known  business  "rustler"; 
General  Connor,  a  temporary  sojourner  from  the  North- 
west, and  I  think  H.  T.  Templeton  had  a  small  inter- 
est. None  of  them  had  any  capital  to  speak  of,  and 
they  had  no  other  design  than  to  peddle  the  francliise 
to   someone  who  had. 

139 


The  Great  Diamond  Hoax 

Of  course,  the  promoters  had  done  nothing  in  the 
wav  of  construction,  and  the  rights  were  in  a  fair  way 
to  lapse,  when  Fred  McCrellish  drew  my  attention  to 
this  paper  property  and  asked  me  to  make  an  offer.  The 
Central  Pacific  was  then  nearing  completion.  Like  most 
people  in  the  State,  I  was  railroad  mad,  and  being  on 
the  lookout  for  everything  good,  I  referred  his  proposi- 
tion to  an  expert.  The  report  of  the  engineer  was  very 
favorable  and  when  I  found  they  wanted  only  $20,000 
for  all  their  rights  and  franchises  for  a  railroad  from 
Sausalito  to  Humboldt  Bay,  I  readily  closed  the  bar- 
gain and  bought  them  out,  all  except  one-tenth,  which 
J.   F.   McCauley  owned. 

Then  I  looked  into  the  proposition  seriously.  I  went 
over  the  ground  in  person,  realized  the  vast  opportuni- 
ities  presented,  particularly  in  the  great  forests  of  the 
Eel  River  country,  which  were  still  Government  land. 
The  way  things  were  going  then,  it  would  have  been 
no  trick  at  all  to  introduce  a  bill  in  Congress  asking 
for  a  land  grant  through  a  country  to  be  traversed  by 
a  railroad,  and  get  half  a  million  acres  or  more  just 
for  the  asking.  It  seemed  to  me  a  bigger  game  than 
all  the  gold  mines,  speculations  and  investments  I  had 
ever  seen  or  dreamed  of.  I  tried  to  interest  Ralston, 
but  he  said  I  was  visionary,  and  made  some  remarks 
about  "back  lands"  and  "coyote  ranges." 

That  did  not  deter  me  in  the  slightest.  I  had  abun- 
dant capital  of  my  own,  and  very  important  financial 
connections,  and  had  no  doul)t  that  I  could  complete 
the  undertaking  on  my  own  account.  With  a  good 
corps   of  engineers   I   began   to   rush   the    work   of   sur- 

140 


Ralston  Acts  as  Mediator 

veys  and  locations  with  my  customary  impetuosity.  Tn 
a  short  time  I  had  the  dirt  flying  at  Petaluma  and 
several  otlier  points  ncjrth.  I  contracted  for  fifty  miles 
of  ties  as  a  start  and  bought  fifty  miles  of  rail,  some 
ten  miles  here  and  the  rest  in  England.  I  was  per- 
fectly infatuated  with  the  railroad  business  and  deter- 
mined to  devote  my  life  and  energies  to  the  work. 

Needing  all  the  money  I  could  get  to  handle  this 
enormous  enterprise,  I  suggested  to  Ralston  that  we 
hold  an  auction  sale  of  our  joint  possessions.  We  had 
laid  out  New  Montgomery  street  in  good  style.  We 
had  completed  our  plans  for  the  Grand  Hotel,  and  the 
inquiry  for  our  holding  was  brisk.  Besides,  San  Fran- 
cisco was  in  the  grip  of  a  tremendous  real  estate  craze, 
the  biggest  in  its  history.  The  railroad  would  be  with 
us  in  a  few  months.     Then  everybody  would  be  rich. 

We  had  incorporated  under  the  name  of  the  Mont- 
gomery Street  Land  Company.  The  moment  an  auc- 
tion sale  of  its  properties  was  announced  the  whole 
town  was  alert.  The  offices  of  the  company  were 
crowded  with  investors  eager  to  purchase  at  private 
sale,  but  were  told  that  we  were  going  to  have  an  old- 
fashioned   auction  and   nothing  else. 

It  ^  was  less  than  a  week  before  this  historic  event 
took  place  when  the  minimum  prices  were  arranged. 
Ralston,  Maurice  Dore  and  myself  met  in  a  back  office 
of  the  Bank  of  California  one  night  and  discussed  this 
all-important  question.  Finally  we  agreed  that  each 
should  write  on  a  slip  of  paper  his  opinion  of  an  aver- 
age price  per  front  foot.  I  based  my  figures  on  a  profit 
of  two  and  a  half  millions,  which  seemed  to  me  a  fair 

141 


The  Great  Diamond  Hoax 

ix'luni.  lUil  when  \vc  came  to  compare  the  shps. 
l\al>t()irs  hi^ures  were  just  (loul)le  mine,  while  l)ore"> 
were  intermediate — nearer  mine. 

Ralston's  nature  was  sani^uine.  He  never  saw  any- 
thing but  success.  He  had  supreme  confidence  in  his 
judgment,  not  without  foundation,  and  possessed  a 
knack  of  bringing  everyone  to  his  own  views.  If  he  was 
right  in  this  instance,  of  course  five  milHon  dollars  were 
more  desirable  than  two  and  a  half.  I  yielded  to  his 
arguments,   but  not   without  grave  misgivings. 

That  auction  sale  was  memorable  for  many  a  year, 
lly  consent,  it  was  held  on  the  floor  of  the  Mer- 
chants' Exchange,  and  there  never  was  such  a  throng 
of  moneyed  men  gathered  together  in  San  Francisco. 
Everyone  seemed  keyed  up  to  buy  a  lot  or  have  a  free 
fight.  AFaurice  Dore  and  his  spieler,  Cobb,  were  past 
masters  in  all  the  auctioneer's  arts  to  promote  enthu- 
siasm. Among  his  "ca])pers,"  to  bid  the  ])rices  u[). 
were  Mills,  Hayward,  Sharon,  Tom  Selby  and  William 
Alvord.  Pandemonium  broke  loose  when  the  first  of- 
fering was  announced.  Men  fought  and  raved,  like 
brokers  filling  "shorts"  on  a  stock  exchange.  The  same 
scenes  were  re-enacted  time  after  time,  but  it  became 
only  too  evident  to  insiders  that  our  "cappers"  were 
picking  up  ever\thing  ostensibly  sold.  Tlie  fact  was 
that  the  public  would  have  gone  above  my  estimate, 
might  base  touched  Dore's.  but  stopped  short  of  Ral- 
st(jn"s.  After  kee])ing  u])  the  hipjxxlrome  long  enough 
to  save  our  faces,  the  great  sale  was  adjourned  with- 
out  a  daw 

r>ut  tliat  wa>n'l  llie  worst  of  it.     For  m()ntll^  we  had 

142 


Ralston  Acts  as  Mediator 

been  liviiii;  in  a  fool's  ])al'a(lise  over  the  l)oom  tlial 
would  follow  the  driving  of  the  last  si)ikc.  Thai  day 
came,  but  what  a  (lisa])pointnieiU  !  It  may  have  seemed 
all  right  to  the  proletariat,  but  for  the  business  people 
it  spelled  ruin.  It  brought  in  an  avalanche  of  goods 
from  Chicago  and  St.  Louis,  at  prices  which  our  local 
men  could  not  meet.  Many  firms  failed,  some  con- 
solidated, some  retired  from  business.  Rents  dropped 
like  lead,  real  estate  values  shriveled  up  to  nothing.  It 
was  ten  years  before  those  values  recovered  to-  the  level 
of   1869.' 

Meanwhile  my  railroad  in  Sonoma  was  being  rushed 
ahead.  I  do  not  think  it  would  have  encountered  oppo- 
sition had  1  stuck  to  my  original  plans  of  a  coast  line 
through  Marin,  Sonoma,  Mendocino  and  Humboldt. 
lUit  my  vision  began  to  broaden.  I  knew  of  Beckwith 
Pass  and  the  almost  increditable  fatuity  that  overlooked 
it  in  constructing  the  Central  Pacific  Railroad.  I  em- 
ployed General  W.  S.  Rosecrans  and  a  corps  of  engi- 
neers and  began  a  railroad  survey  westward  from  the 
pass,  to  connect  with  the  Humboldt  system.  I  guess 
this  gave  the  P)ig  Four  the  largest  scare  they  received 
in   many  years. 

Instantly  I  found  my  enterprise  blockaded  with  all 
kinds  of  petty  obstructions.  I  had  thirty  miles  of  road 
graded  and  the  ties  strung.  Peter  Donahue  had  partly 
agreed  to  sell  me  the  rails.  Suddenly  he  withheld  them 
from  the  market,  and  there  w'ere  no  more  on  the  Pa- 
cific Coast.  I  had  twenty  miles  of  rail  on  the  water 
from  England.     The  vessel  was  detained   at  \^alparaiso 

143 


The  Great  Diamond  Hoax 

aiul   at  last   sunk   ])cacctiilly    in    the   harl)()r.      My   ag'cnt, 
A.  A.  Cohen,  always  claimed  the  shi])  was  scuttled. 

T  ordered  another  large  shipment  from  l*2ngland.  Then 
the  railroad  people  tried  another  tack.  They  appealed 
to  Ralston  to  subdue  nie.  Ralston  had  been  the  friend 
of  the  Big-  Four  in  the  trying  construction  days.  They 
had  promised  him  all  sorts  of  things  in  return,  among 
others  a  concession  to  build  all  their  cars,  for  which 
he  made  great  preparations.  They  plainly  told  him 
that  if  he  did  not  constrain  me,  his  estimable  partner, 
to  abandon  my  railroad  projects,  the  concession  would 
be   canceled   and   he   could   expect   nothing  but   war. 

Ralston  laid  the  matter  before  me  as  a  friend.  He 
admitted  that  he  had  no  right  to  influence  my  action, 
but  said  he  was  facing  an  enormous  loss ;  that  I 
could  sell  out  at  a  large  profit,  and  frankly  asked  me 
to  strain  a  point.  The  matter  once  placed  in  that  light, 
I  yielded,  with  great  reluctance.  After  some  negotia- 
tions, I  sold  my  railroad  rights  to  Peter  Donahue. 
These  rights,  only  partially  developed,  constituted  the 
bulk   of  his   great   fortune. 

That  incident  made  a  vast  difference,  not  alone  in 
my   fortunes,   but   in   the   history   of   California. 

Left  to  myself,  I  would  have  had  a  railroad  to  Hum- 
boldt bay  thirty-five  years  ago,  and  w^ould  now  be  the 
owner  of  the   Northwestern   Pacific  Railroad. 

Also  it  is  more  than  j)rol)able  that  my  youthful  en- 
ergies would  have  carried  another  railroad  eastward 
through  lieckwith  Pass.  That  would  have  made  his- 
tory, changed  our  Governors,  United  States  Senators, 
bosses  and  the   whole   machinery   of  state. 

144 


Ralston  Acts  as  Mediator 

As  for  poor  Ralston,  he  was  g-ol(l-l)rickc(l.  I  To  never 
received  the  car  concession  at  aU.  I  cannot  tell  wliy, 
for  I  was  ont  of  the  State  when  that  scheme  went  up 
in  smoke.  The  great  huikling  he  had  constructed  for 
the  purpose  was  converted  into  the  West  Coast  Fur- 
niture Company's  plant,  which  was  operated  during 
his   lifetime  at  a  heavy  loss. 

I  can  only  think  of  Ralston  as  a  long  cherished  and 
lamented  friend.  But  so  far  as  business  went,  our  ac- 
quaintance began  and  ended  under  an  unlucky  star. 


145 


CI lA ITER  XIX. 

Two  AIen  Block  Plax  to  Run  Xew  [NIoxtgo.merv 
Street  to  the  Bay;  One  Asks  Coin,  Other  Pre- 
fers Fight. 

Promoters  .Ippcal  to  Legislature  and  Do  Xot  Xeglect 
Precaution   of  First  "Seeing"    J'ote  Brokers. 

\\'\\cn  Ralston  and  I  opened  Xew  Montgomer}-  street 
we  never  doubted  that  its  manifest  iniportanee  would 
eompel  an  immediate  and  voluntary  extension  to  the 
natural  terminus  of  the  water-front  and  prove  the  logi- 
cal outlet  for  congested  trade.  That  this  would  have 
been  the  case  had  the  majority  of  ])roperty  owners 
been  able  to  follow  our  example.  I  have  no  reasonable 
doubt.  P)iU  iu>t  as  in  the  case  of  "Montgomery  Street 
Straight.""  s])ecial  interests  and  selfish  considerations 
stood  in  the  way.  Less  than  half  a  dozen  pro])erty  own- 
ers, to  their  irreparable  disadvantage,  blocked  "Mont- 
gomery Straight" — a  project  that  would  have  changed 
the  whole  course  of  the  city's  ]:)rogress  and  develo])- 
ment.  Just  two  ]jro])erly  owners  ])rc\'ented  tlie  imme- 
diate exten>ion  of  Xew  MonlgomcrN-  street  to  the  baw 
and  again  the   failure  was  the  cit\'s  heav\-  loss. 

These  two  men  were  .Milton  .S.  Lalhani  and  John  I 'ar- 
rott.  Latham  owned  a  stateh  home  and  large  grounds 
on  b'olsom  street,  directly  in  the  line  of  the  new  thor- 
oughfare.     It  was  a   matter  of   no   small   i)crsonal    pride. 

146 


Two  Men  Block  Plan 

and  (loul)tless  lie  was  attacluMl  to  the  localit}-.  He  asked 
such  a  fabulous  price  for  the  rii^ht-of-way,  which  of 
course  would  ha\-e  destroyed  the  houie  value  of  the 
])roperty,  that  eveu  Ralston  and  myself,  who  were  ac- 
customed to  brush  any  minor  obstacles  out  of  our  way 
without  counting-  costs,  stood  aghast. 

John  l^arrott,  on  the  other  hand,  wouldn't  trade  at 
all.  His  business  hours  were  then  strictly  limited  from 
9  to  half-past  10,  and  every  time  we  managed  to  secure 
an  interview,  all  the  satisfaction  we  could  get  out  of 
him  was  a  promise  to  fight  us  every  inch  of  the  way. 

Outside  of  these  two,  we  had  a  clear  field.  We  se- 
cured contracts  on  a  great  number  of  properties  along 
the  line  of  the  proposed  thoroughfare.  All  the  large 
owners  concerned  favored  it  with  enthusiasm.  Still  we 
were  absolutely  blocked. 

Under  these  conditions,  nothing  remained  but  an  ap- 
peal to  the  Legislature  to  appoint  a  commission,  em- 
powered to  open  New  Montgomery  street  for  its  full 
length  and  assess  benefits  and  damages  as  provided  by 
the  general  laws  then  in  force. 

And  while  about  it,  we  did  not  stop  there.  We 
worked  out  a  grand,  comprehensive  scheme  of  improve- 
ment,  embracing  the   immense  territory   to   the  south. 

Two  years  before,  a  l)ill  had  been  lobbied  tlirough  the 
Legislature  providing  for  what  became  famous  later  on 
as  the  "Second  Street  Cut."  It  was  a  rascall)'  project, 
a  sordid  bit  of  real  estate  roguery,  carried  through 
without  a  moment's  thought  of  other  people's  rights. 
But  it  was  an  accomplished  feat,  and  one  of  the  results 
\vas    to    ruin    the    finest    haunt    of    goofl    breeding    San 

147 


The  Great  Diamond  Hoax 

l-Vancisco  ever  had.  I'amilies  were  scatterinrr  from  Rin- 
con  I  nil  to  various  sections  of  the  city.  The  old  high- 
priced  residence  property  was  going  for  a  song.  As 
the  "Hill"'  had  ceased  to  be  either  beautiful  or  useful, 
Ralston  and  I  calmly  proposed  to  cut  it  down. 

We  planned  to  have  the  city  buy  the  property,  which 
could  be  purchased  for  $5,000,000  according  to  arrange- 
ment with  the  owners,  and  grade  it  to  the  Market- 
street  level.  Alany  million  cubic  yards  of  excavated  ma- 
terial were  used  to  fill  in  a  150-acre  tract  of  tide  land, 
offered  to  the  city  by  the  State  at  a  nominal  price,  lying 
between  the  Pacific  Mail  docks  and  Islais  Creek ;  also 
to  reclaim  China  Basin,  at  least  in  part.  The  cost  of 
grading  and  reclamation  work  was  estimated  at  $7,000,- 
000;  in  fact,  contractors  were  willing  to  undertake  it  at 
that  price.  In  other  words,  the  city  was  asked  to  issue 
its  bonds  for  $12,000,000  and  receive  in  payment  over 
200  blocks  of  choice  property,  to  say  nothing  of  great 
advantage  to  the  appearance  of  the  town  and  the  fa- 
cilities  for  doing  business. 

Two  separate  bills  were  introduced  in  the  Legisla- 
ture. One  provided  for  the  opening  of  New  Montgom- 
ery street  to  the  bay,  and  created  a  commission  to  carry 
out  its  ])urpose  as  above  defined.  This  would  probably 
have  slipped  through  without  any  serious  opposition ; 
but  coupled  with  it,  in  a  way,  was  the  great  construc- 
tive bill  for  acc|uiring  Rincon  Hill,  for  filling  the  tide- 
land  acreage  and  China  Basin  and  running  all  the  streets 
lr(jm  First  to  Third,  including  an  extension  of  San- 
some  street,  on  a  nearly  level  grade,  southward  to  the 
waterfront.  l'"or  the  extension  of  Sansome  street  Michael 

148 


% 

THE    AUTHOR 

Taken    during    his   active    career 

in    San    Francisco 

• 

Two  Men  Block  Plan 

Reese.  Llo\'(l  Tevis  and  myself  Iiad  boiiL^ln  a  solid  block 
from   Market  to   Folsom  street. 

1  was  very  much  a  novice  in  ])olitics,  l)ut  Mr.  Kalston 
insisted  that  I  should  have  full  charge  of  the  jM-ogram 
and  take  up  m\  residence  in  Sacramento  pending  the 
session  of  the  Leg"islature.  So  among'  other  things  I 
gathered  (|uite  an  exact  idea  of  how  wires  used  to 
be   mani])ulated    underground. 

In  the  first  place,  the  necessity  of  a  Legislature  was 
not  apparent  at  that  time.  What  had  been  an  able  and 
independent  body  in  the  early  history  of  California  had 
degenerated  to  a  mere  recording  machine  for  a  couple 
of  vote  brokers,  "Nap"  Broughton  and  "Zeke"  Wil- 
son by  name.  "Xap,"  brief  for  Napoleon,  was  a  happy, 
enthusiastic  chap,  always  slapping  someone  on  the  back 
with  a  heartiness  not  always  quite  sincere :  a  good  fel- 
low in  his  way.  and  a  most  abandoned  corrupter  of 
men,  a  spendthrift  disciple  of  nearly  every  sin,  with 
an  ever- watchful  eye  on  the  money  of  others,  yet  him- 
self the  veriest  sucker  that  ever  lived. 

"Zeke"  Wilson,  on  the  other  hand,  was  a  gray,  desic- 
cated, sinister,  old  s])ider,  who  seldom  smiled,  and  when 
he  did  everyone  in  his  presence  felt  depressed.  He  was 
the  "thinking  member"  of  the  duumvirate,  and  while 
"Nap"  Broughton  made  nearly  all  the  noise  "Zeke" 
Wilson  laid  the  plans. 

The  Senate  used  to  be  respectable  in  appearance,  an 
able  body  and  reasonably  clean.  The  one  that  I  was 
concerned  with  contained  such  men  as  Hager  and  Saun- 
ders of  San  Francisco,  George  C.  Perkins  of  Butte,  who 
made  then  his  first  appearance  in  politics ;  Rumaldo  Pa- 

151 


The  Great  Diamond  Hoax 

checo.  afterward  Governor;  Pendergast  of  Napa.  Lewis 
of  Tehama,  and  several  others  whose  names  are  fairly 
connected  with  the  history  of  the   State. 

The  Assembly,  on  the  other  hand,  was  a  conglom- 
eration of  miscellaneous  ritT-rafT.  gathered  together  God 
knows  how.  inexperienced,  ignorant,  venal  and  scan- 
dalously cheaj).  Of  course  there  were  some  honorable 
exceptions.  I  am  only  speaking  of  the  general  rule.  It 
was  in  the  Assembly,  not  the  Senate,  that  the  "busi- 
ness" of  the  session  was  done.  That  is,  if  Messrs. 
Broughton  and  Wilson  wanted  to  kill  a  measure,  they 
never  worried  what  the  Senate  did.  but  let  the  obnox- 
ious bill  come  before  the  "popular-priced"  Assembly, 
where  its  shrift  was  short. 

No  one  in  his  senses  ever  came  to  Sacramento  with 
a  bill  involving  a  considerable  question  of  finance  with- 
out establishing  friendly  relations  with  Messrs.  Brough- 
ton and  Wilson  at  the  start.  Treaties  of  alliance  were 
negotiated  through  Xapoleon  Broughton.  At  our  first 
interview  $35,000  passed  hands.  "Nap"  merely  said 
in  a  casual  way  that  I  was  a  gentleiuan  and  I  accepted 
the  compliment  for  what  it  was  worth.  What  became 
of  that  money  I  have  no  means  of  knowing,  and  never 
in(|uired.  That  would  have  been  the  height  of  bad  luan- 
ners.  But  he  never  asked  me  for  any  more,  and  every- 
thing I  wanted  slid  through  the  Assembly  on  greased 
ways. 

We  were  among  the  first  who  made  a  consistent  ef- 
fort to  impress  the  merits  of  our  measures  on  law- 
makers by  systematic  good-fellow'ship.  I  practically 
cliartcrcd  a  well  known  restaurant,  tlu'ew  it  open  to  my 

152 


Two  Men  Block  Plan 

friends,  and  the  bills  were  over  $400  a  day,  so  gener- 
ously did  they  respond  to  my  invitation.  Down  in 
San  Francisco,  Ralston  was  on  the  lookout  for  states- 
men, and  none  of  them  struck  the  town  without  good 
cause  to  remember  the  experience  pleasantly. 

In  a  way,  it  was  a  striking  session — a  sort  of  break- 
ing of  new  ground.  The  railroad  appeared  for  the 
first  time  as  a  seeker  for  favors.  It  had  two  leading 
bills,  each  providing  for  a  subsidy  for  railroads  south- 
ward, one  through  the  San  Joaquin  Valley  and  one 
along  the  coast  line.  Neither  terminated  anywhere  in 
particular;  the  former  somewhere  in  Kern  county,  the 
latter  in  San  Luis  Obispo  county,  near  the  border  line 
of  Santa  Barbara.  The  measures  simply  authorized  the 
electors  of  the  counties  concerned  to  vote  for  a  subsidy 
payable  to  the  first  railroad  that  came  along.  The  com- 
bined subsidies  provided  for  amounted  to  only  $3,000,- 
000,  but  they  were  regarded  as  the  opening  wedges 
for  more.  Of  course  everyone  knew  what  that  first 
railroad  would  be.  Strangely  enough,  in  the  newspaper 
and  legislative  discussions,  no  one  seemed  to  think  that 
Los  Angeles  cut  any  figure  as  a  terminal  or  feeder. 
The  cry  was  for  a  railroad  south  to  the  Colorado  river. 
For  that  the  people  were  willing  to  pay  any  kind  of 
subsidy,  but  not  a  cent  for  a  couple  of  local  concerns. 
A  bitter  newspaper  war  followed,  and  charges  of  cor- 
ruption were  freely  made.  But  the  bills  passed  both 
houses  by  large  majorities,  and  were  only  halted  in  their 
triumphant  progress  by  the  veto  of  Governor  Haight. 
Even  then,  it  was  a  close  call.     The  Assembly  enthusi- 

153 


The  Great  Diamond  Hoax 

astically  passed  f)iie  of  them  over  his  veto,  and  in  the 
Senate  the  same  action    failed  l)y   only   two  votes. 

There  were  so  many  l)il]s  of  a  shady,  not  to  say  rot- 
ten, nature  introduced  dtu'inL;'  the  session  that  almost 
all  measures  were  looked  on  as  "jobs.""  Our  two  bills — 
"Alonti^omer)-  South'"  and  the  effacement  of  Rincon 
Hill — took  their  i)laces  with  the  rest.  They  were  harshly 
criticized  by  most  of  the  San  Francisco  papers  as  crafty 
schemes,  the  true  inwardness  of  which  would  develop 
later  on.  'Jdiey  were  likened  to  the  "Second  Street 
Cut"  outra,^e.  and  a  lot  of  ill-advised  public  opinion 
was  worked  up  a.^ainst  both.  Nevertheless,  they  passed 
the  Legislature.  How  one  of  them  became  a  law  is  an 
interesting-  story,  told  in  many  official  records  of  the 
State. 

The  bill  for  the  extension  of  New  Montgomery  street 
had  gone  to  Governor  Haight.  It  leaked  out  from  the 
executive  chambers  that  a  veto  message  was  being  pre- 
pared. The  Governor  had  ten  days  in  which  to  veto 
the  bill,  otherwise  it  became  a  law  by  default.  It  was 
on  the  afternoon  of  the  last  day,  shortly  after  the 
Senate  had  reassembled,  when  one  of  my  attorneys, 
Greed  I  la\iuond.  >aid  in  a  musing  wa_\',  "If  the  Senate 
could  onl_\-  be  induced  to  adjourn  we  would  not  have 
til  worry  al)out  a  \'eto  message.  Then  it  could  not  be 
delivered  to  anyone,  and  by  twelve  o'clock  to-night 
would  become  a  law.""  That  set  me  thinking  in  a 
moment.  "Is  that  correct?"  I  asked.  Haymond  re- 
]:)lied  that  he  was  certain,  although  he  was  not  sure 
that  the  ])oint    had   ever  been  tested   by  the  courts. 

The    emergency   deniandt-il    swift    work.      To   offer    a 

154 


Two  Men   Block  Plan 

motion  to  adjourn,  just  after  settling-  down  to  busi- 
ness, would  certainly  liavc  aroused  sus])icion  and  a  .gen- 
eral rumpus.  Ilere  I  worked  in  a  hit  of  strategy  or 
what  might  have  more  properly  lieen  called  chicane, 
wliicli  1  trust  may  be  ])ardoned  me  in  my  final  account. 

Senator  John  S.  Hag'er  was  the  leader  of  what  might 
be  called  the  "reformers"  and  had  quite  a  following 
among"  his  fellow  members.  He  was  the  unwearied  foe 
of  anything  like  a  job.  Among  other  measures,  he  had 
o])posed  the  Montgomery  Street  Extension  bill.  But 
there  were  several  bills  on  a  special  file  that  afternoon 
that  were  his  pet  abominations  and  he  justly  feared 
that  they  might  slip  through.  While  in  this  frame  of 
mind,  a  certain  gentleman  called  him  aside  and  ad- 
vised him  that  several  members  were  anxious  for  an 
adjournment,  that  if  he  would  make  the  motion  it 
would  probably  carry  and  the  obnoxious  bills  would 
lose  their  places  on  the  special  file  and  their  chance  of 
final  passage. 

The  Senator  swallowed  the  bait — hook,  sinker  and  all. 
While  he  was  lining  up  the  "reformers,"  somebody 
else  was  attending  to  the  "performers,"  and  when  the 
gentleman  made  his  motion  to  adjourn  he  must  have 
been  gratified  at  the  unexpected  support.  It  went 
through  nem  con,  as  the  lawyers  say.  The  officers  of 
the  Senate  were  hurried  out  of  the  room  on  one  pre- 
text or  another  and  in  a  few  minutes  the  chamber  was 
vacant. 

Dr.  Edward  R.  Taylor,  later  Mayor  of  San  Francisco, 
was  the  very  efficient  private  secretary  of  Governor 
Haight.     I  was  in  an  agony  of  fear  lest  he  should  pop 

155 


The  Great  Diamond  Hoax 

into  the  Chamber  with  the  fatal  message  before  the 
adjournment  could  be  arranged.  For  this  reason,  I  had 
several  effective  conversationalists  stationed  between  the 
Governor's  office  and  the  Senate,  to  engage  the  secre- 
tary for  a  few  minutes  if  he  chanced  to  appear.  This 
they  actually  did,  although  Dr.  Taylor  has  forgotten 
the  incident.  What  he  does  remember  was  that  he 
found  much  to  his  surprise  an  empty  Senate  Chamber, 
and  after  ruminating  over  the  situation  for  a  time, 
carried  back  the  veto  message  to  the  Governor's  office 
and  laid  it  on  his  desk. 

On  the  following  day  the  Governor  attempted  to  de- 
liver his  message,  but  the  Senate  held  he  was  too  late. 
His  Excellency  refused  to  certifiy  the  bill  to  the  Secre- 
tary of  State  as  passed  and  I  brought  a  mandamus  suit 
to  compel  him  to  take  that  action.  The  title  of  the  case 
was  Harp  ending  vs.  Haight,  and  attracted  a  wide  atten- 
tion at  the  time.  It  was  carried  to  the  Supreme  Court 
on  an  agreed  statement  and  decided  within  fifteen  days 
in  my  favor.  The  decision  can  be  found  in  Vol.  39, 
Cal.  Reports,  page  189.  Other  Governors  have  been 
cautious  not  to  hold  back  their  vetoes  till  the  last  day. 
Hager  roared  like  a  wounded  bull  buffalo  when  he 
found  out  how  he  had  been  used,  but  his  lamentation 
bore  no  fruit. 

Thus  the  Montgomery  South  bill  became  a  law  of  the 
State,  although  the  Governor  liked  it  not.  Commis- 
sioners were  appointed  by  Judge  Lake,  a  lot  of  work 
was  done  in  surveys,  estimates  of  benefits  and  damages, 
but  in  the  end  it  came  to  naught.  Two  years  later, 
while   I   was  in   Europe,  a  bill  with   a   misleading  title, 

156 


Two  Men  Block  Plan 

designed  to  repeal  the  act,  was  introduced  and  Ralston, 
busy  with  many  things,  never  knew  about  it  until  it  had 
sneaked  through  both  houses  and  become  a  law.  Be- 
cause of  this,  New  Montgomery  street  still  halts  at 
Howard  street  and  bids  fair  to  camp  there  forever  more. 

As  to  the  Rincon  Hill  measure,  that  also  passed  both 
houses  triumphantly,  but  was  held  back  through  the  op- 
position of  Senator  Hager,  so  that  it  went  to  the 
Executive  just  one  day  beyond  the  period  when  a  re- 
turn to  the  Legislature  must  be  made.  It  found  a 
peaceful  resting  place  in  the  Governor's  capacious 
pocket. 

Thus  all  our  grand  schemes  for  the  development  of 
the  city  southward  fell  by  the  dreary  wayside  of  lost 
opportunity.  I  do  not  pretend  for  a  moment  that  Ral- 
ston and  myself  were  inspired  in  our  efforts  by  the 
pure  spirit  of  benevolence.  We  would  have  made  our 
profit,  but  a  mere  trifle  in  comparison  to  the  public  good. 
It  was  the  most  comprehensive  plan  for  the  city's  im- 
provement ever  presented  in  a  concrete  form,  and  the 
pity  is  it  was  not  better  understood. 

Just  take  a  retrospect.  Who  is  there  who  would  not 
admit  that  five  fine  level  streets  from  Market,  between 
First  and  Third,  southward  to  the  bay,  would  not  be  a 
vast  improvement  and  convenience  to  business,  over  the 
blockade  that  prevails  to-day? 

And  was  such  a  real  estate  proposition  ever  before 
offered  to  a  people  and  turned  down?  For  the  sum  of 
$12,000,000  the  city  would  have  acquired  full  title  to 
approximately  two  hundred  and  twenty  blocks,  the  pres- 
ent value  of  which  would  be  hard  to  estimate  exactly. 

157 


The  Great  Diamond  Hoax 

But  a  rough  valuation  indicates  that  the  property  would 
be  worth  enough  to  pay  the  entire  city  debt,  buy  the 
Spring  Valley  Water  Company's  plant,  luring  in  the 
Hetch-Hetchy  water  supply  and  leave  a  balance  large 
enough  perhaps  to 'settle  all  questions  w  itli  the  I'nited 
Railroads  and  municipalize  the  entire  street  transporta- 
tion system,  not  in  the  dim  future,  but  now. 

Immense  revenues  would  have  flowed  into  the  munici- 
pal treasury  from  these  utilities.  Taxation  would  have 
become  a  joke.  All  these  things  are  among  the  hag- 
gard, melancholy  "might  have  beens." 

There  were  too  many  well-intentioned,  l)ut  bigoted, 
reformers  in  the  cit}'  then,  just  as  there  are  now. 

And  the  incident  serves  to  indicate  the  superiority  of 
hindsight  over  foresight,  which  has  been  illustrated  un- 
happily and  too  often  in  the  history  of  the  State. 


158 


CHAPTER  XX. 

Burning  of  Harpending  Block  Provides  Fin^^pec- 
TACLE,  But  Oversight  of  Owner  Costs  Him  Dearly. 

George   Hearst   Makes   Stake    on    Coinstock    and   Cele- 
brates by  Taking  Joe  Clark  on  a  Trip  to  Europe. 

I  was  busy  with  other  things  besides  real  estate  in- 
vestments, financing  railroads,  and  politics,  during  the 
five  years  between  1865  and  1870.  In  1869  I  built  the 
first  fine  business  block  on  the  south  side  of  Market 
street,  the  Harpending  Block,  between  First  and  Second 
streets.  It  was  also  in  1869-1870  that  Ralston  and  my- 
self built  the  Grand  Hotel,  partly  on  our  own  land, 
partly  on  land  belonging  to  the  Piatt  estate,  which  we 
held  under  20  years'  lease. 

The  Harpending  Block  cost  nearly  $400,000.  It  was 
burned  two  years  later,  contributing  the  biggest  fire 
in  San  Francisco  since  the  '50's.  Through  an  oversight 
of  my  agent,  the  insurance  hardly  represented  a  tenth 
of  the  loss.  The  Grand  Hotel  remained  for  several 
years  the  last  word  in  the  hotel  business  of  the  Pacific 
Coast.  It  was  its  phenomenal  success  from  the  outset 
that  induced  Ralston  later  to  embark  in  the  Palace  Hotel 
project,  which  contributed  in  a  large  measure  to  his 
ruin.  I  owned  a  three-fourths  interest  in  the  Grand 
Hotel ;  Ralston  owned  the  l^alance. 

159 


The  Great  Diamond  Hoax 

Xo  one  who  has  ever  had  much  to  do  with  mining 
can  keep  out  of  that  fascinating  business  very  long. 
When  I  returned  to  San  I'"rancisco  from  Havilah,  it  was 
my  solemn  intention  to  abandon  mining  forever  there- 
after and  confine  my  efforts  to  what  was  known  as 
"legitimate  business,"  whatever  that  may  be ;  I  have 
never  found  out.  Rut  I  hadn't  more  than  barely  got  my 
l)earings  before  I  began  to  make  casual  incursions  in  a 
sly  way  into  the  old  field  of  endeavor,  and  thus  had  a 
personal  and  financial  acquaintance  with,  I  think,  all  of 
the  heroic  figures  who  created  the  vast  deep-mining  in- 
dustry of  the  far  West. 

Only  one  of  these  big  men  has  lasted  down  to  our 
own  time.  J.  B.  Haggin  *  still  lives  at  his  home  in  Lex- 
ington, Ky.,  at  a  great  age — 90  or  more — and  until 
recently  in  the  enjoyment  of  good  health.  A  story  used 
to  be  current  in  San  Francisco  that  in  the  early  pioneer 
days  Haggin  was  a  devotee  of  play  at  the  El  Dorado 
and  Union.  One  night,  so  the  narrative  runs,  after 
successive  losses  he  borrowed  $100,  to  win  or  take  the 
gambler's  last  alternative.  But  he  had  no  occasion  for 
the  latter.  He  stood  calm  and  imperturbable  as  the 
hundred  became  a  thousand,  and  then  tens  of  thousands, 
while  a  circle  of  nmte,  white-faced  gamblers  stood  fasci- 
nated at  his  luck,  until  the  proprietor,  in  a  voice  that 
showed  no  tremor,  quietly  announced  the  bank  closed 
for  the  night.  The  story  goes  on  to  say  that  Mr.  Hag- 
gin never  touched  a  card  from  tliat  day  forth.  All  of 
this  I  have  only  on  hearsay.  Mr.  Haggin  lives  to  tell 
whether  it   is  true  or   false. 


*  Since  the  above  was  written,  Mr.  Haggin  died. 

160 


J.    B.    HAGGIN 

Successful    miner  and    a   true 

financial   genius 

Burning  of  Harpending  Block 

But  if  he  abandoned  gambling  in  one  direction,  he 
took  it  up  in  another.  In  the  mining  industry  he  was  a 
plunger,  par  excellence.  I  do  not  mean  that  he  invested 
recklessly  or  without  mature  investigation,  but  when 
he  once  made  up  his  mind,  a  few  millions,  more  or  less, 
never  moved  him  from  his  purpose.  The  broad,  liberal 
way  he  played  the  game  had  more  to  do  with  the  de- 
velopment of  the  West  than  perhaps  anything  else. 

Haggin  had  nothing  in  common  with  good  fellow- 
ship. He  was  always  silent,  sober  and  cold.  But  under 
it  all  he  must  have  had  a  heart.  He  was  the  only  one 
I  ever  knew  who  remembered  the  men  who  helped  to 
give  him  wealth.  Every  man,  without  exception,  who 
rendered  Haggin  faithful,  efficient  service,  he  made  rich. 
And  he  was  very  loyal  to  his  friends.  In  these  days — 
and  other  days — when  men  of  power  exhaust  the  energies 
of  their  subordinates  and  then  toss  them  without  concern 
on  the  scrap  pile,  like  so  many  sucked-out  oranges,  and 
treat  their  business  associates  just  a  shade  better,  an 
example  such  as  Haggin  gave  ought  not  to  be  overlooked. 

George  Hearst  was  probably  the  greatest  natural 
miner  who  ever  had  a  chance  to  bring  his  talents  into 
play  on  a  large  scale.  He  was  not  a  geologist,  had 
no  special  education  to  start  with,  was  not  overbur- 
dened with  book  learning,  but  he  had  a  congenital  in- 
stinct for  mining,  just  as  some  other  people  have  for 
mathematics,  music  or  chess.  He  was  not  a  man  of 
showy  parts,  liked  the  company  of  a  lot  of  cronies,  to 
whom  he  was  kind  and  serviceable — when  he  wasn't 
broke  himself — was  much  inclined  to  take  the  world 
easy,  but  if  anyone  mentioned  mines  in  his  presence,  it 

163 


The  Great  Diamond  Hoax 

had  the  same  effect  as  saying.  "Rats!"  to  a  terrier. 
Hearst  became  alert  and  on  dress  parade  in  a  moment. 

Hearst  made  his  first  big'  stake  on  the  Comstock 
Lode,  a  year  after  it  was  uncovered  in  185(S.  He  was 
associated  with  his  cousin,  Joe  Clark,  and  William  M. 
Lent.  I  do  not  know  the  exact  size  of  the  clean-up, 
but  it  must  have  reached  into  seven  figures.  Such  an 
event,  in  the  old  days  was  always  made  memorable  l)y 
some  kind  of  a  '"jamboree." 

Now%  Joe  Clark  was  a  southwestern  man.  hailing  from 
a  section  not  far  from  where  I  originated  myself.  All 
of  us  were  inclined  to  be  provincial.  For  instance.  Joe 
Clark  believed  that  St.  Louis  was  not  only  the  most 
magnificent  but  the  largest  city  in  the  world.  He  had 
many  heated  discussions  on  the  subject  and  several  times 
backed  his  opinions  with  coin.  He  declared  that  the 
Rue  de  Rivoli  w-as  a  pale  shadow  alongside  of  the 
glories  of  Laclede  avenue.  He  swore  that  St.  Louis 
was  bigger  than  London,  more  cultured  than  Athens 
during  the  age  of  Pericles  and  grander  and  more  pic- 
turesque than  Babylon,  when  the  hanging  gardens  were 
in  full  bloom. 

It  is  said  that  Hearst  suggested  a  "blow  out"  in 
Europe  after  their  clean-up.  in  order  to  disabuse  his 
kinsman's  mind  of  certain  illusions  respecting  St.  Louis. 
At  any  rate,  the  two  husky  young  miners  set  their  faces 
eastward  to  look  over  the  effete  monarchies  of  the 
r)ld  World. 

While  they  were  pleasure  bound.  "T)i]]"  Lent  stayed 
behind  to  look  after  the  investments.  I  Ic  sunk  a  shaft 
which  iieaded  dead  on  for  the  big  ]K)nanza  and  had  he 

164 


GEORGE    HEARST 

An    unsurpassed    mining    genius, 

former   U.    S.    Senator 


Burning  of  Harpending  Block 

continued  the  work  a  little  furtiier,  Mood,  O'Brien, 
Mackay  and  l^air  woukl  have  cut  a  very  small  figure  in 
history.  But  he  engaged  unfortunately  in  a  seductive 
looking  speculation  and  went  to  pieces  in  a  grand  pyro- 
technic and  spectacular  failure.  Hearst  and  Clark  were 
hopelessly  involved.  They  received  the  news  while  they 
were  making  the  tour  of  Europe  with  much  eclat.  For- 
tunately they  had  money  enough  to  reach  home.  But 
the  main  object  of  the  journey  was  accomplished.  When 
Joe  Clark  mentioned  St.  Louis  thereafter,  it  was  the 
voice  of  a  chastened  soul  that  spoke. 

Of  course,  nothing  could  keep  Hearst  down  in  a 
mining  region.  Any  capitalist  was  only  too  eager  to 
back  a  man  with  such  surpassing  talents ;  but  he  had 
to  pay  an  awful  toll.  P^or  years  Hearst's  projects  were 
financed  at  2^  per  cent,  per  month  compounded  month- 
ly, and  any  business  that  can  stand  that  strain  and  come 
out  ahead  must  have  a  solid  foundation  to  build  on.  He 
was  the  real  founder  not  only  of  his  own  but  of  the  vast 
Haggin  and  Tevis  fortunes. 

I  had  mining  deals  of  more  or  less  importance  with 
Haggin,  Hearst,  Hayward,  Hobart,  Grayson,  in  fact, 
with  nearly  all  the  large  operators  of  those  times.  My 
largest  speculations,  however,  were  with  Ralston  as  a 
silent  partner,  which,  on  average,  showed  more  profit 
than  loss.  It  was  for  the  purpose  of  joint  investment 
that  late  in  the  fall  of  1870  I  visited  the  Emma  mine 
near  Salt  Lake  City,  which  a  year  later  was  the  central 
point  of  a  great  international  scandal  and  will  play  an 
important  part  in  this  narrative. 


167 


CHAPTER  XXI. 

Sam  Braxnax  Strikes  It  Rich  axd  Refuses  to 
Share  With  IMormox  Church  Except  on  Order 
From  Lord. 

Mijic   Bargain    Fails   to   Stand  Inquiry   of  AutJior,   But 
Others  Iiiz'cst  and  Figure  as   llctiins   of  Fraud. 

I  had  early  been  familiar  with  Utah  and  its  mines, 
through  an  acquaintance  with  "Sam"  Brannan.  Bran- 
nan  had  a  history  of  thrills  and  adventures  which  if 
gathered  into  book  form  would  make  the  heroes  of 
Dumas  look  cheap  and  commonplace.  Originally  a 
Mormon,  high  in  the  councils  of  Brigham  Young,  he 
led  a  body  of  his  co-religionists  around  Cape  Horn 
to  California,  before  the  earliest  Argonauts.  He  staked 
out  claims  on  the  American  River,  about  two  miles 
from  where  Folsom  prison  stands,  the  location  being 
known  as  "Mormon  Island"  to  this  day.  The  dig- 
gings were  so  rich  that  one  of  California's  evanescent 
cities  sprang  up  around  it,  almost  overnight,  just  as 
suddenly  to  disappear.  "Sam"  worked  his  companions 
on  a  per  diem  basis  and  very  soon  accumulated  a 
large  fortune — certainly  in  excess  of  a  million  dollars, 
many  well  informed  people  estimating  it  at  two  or  three 
times  as  much.  But  while  he  settled  promptly  his 
labor  bills,  he  was  not  so  businesslike  in  squaring  ac- 
counts with  the  Mormon  Church,  which  claimed  nearly 

168 


Sam  Brannan  Strikes  It  Rich 

all  the  profits.  Finally,  a  trusted  agent  was  dispatched 
from  Salt  Lake  City  with  a  peremptory  order  on  Bran- 
nan  to  turn  over  the  ecclesiastical  share  of  the  "dust" 
at  once. 

Brannan's  reply  was  historic  and  to  the  point,'  even 
if  a  bit  profane.  The  gold,  he  said,  had  been  placed  in 
his  safe  keeping  on  the  Lord's  account.  He  would  sur- 
render it  u])on  the  Lord's  ]iroper  written  order;  other- 
wise  not. 

"Sam"  invested  most  of  his  wealth  in  San  Francisco 
real  estate.  An  important  street  bears  his  name.  Like 
most  of  the  early  Mormon  leaders,  he  was  of  a  coarse- 
fibered  nature,  with  a  rather  forbidding,  saturnine  face, 
but  singularly  keen-witted,  resolute,  and  fearing  neither 
man  nor  devil. 

The  latter  quality  stood  him  in  good  stead.  Brigham 
could  not  permit  such  a  flagrant  breach  of  church  discip- 
line to  remain  unpunished.  Flock  after  flock  of  "de- 
stroying angels"  took  flight  from  Salt  Lake  City,  duly 
commissioned  to  bring  back  Samuel's  scalp  or  perish  in 
the  attempt.  But  their  holy  work  was  always  a  dismal 
failure.  Brannan  must  have  had  some  foreknowledge  of 
their  movement  against  the  security  of  his  person. 
Liking  not  to  meet  "angels"  unawares  of  any  kind,  he 
arranged  to  encounter  the  "destroyers"  half  way  out  in 
the  trackless  desert,  or  mountain  fastnesses,  with  a 
competent  group  of  exterminators  he  seemed  to  keep 
on  hand  for  such  occasions ;  and  it  was  the  "angels" 
who  were  always  taken  unawares.  Some  of  them  got 
back  to  Salt  Lake  minus  tail  feathers  and  other- 
wise damaged,  l)ut  the  majoritv  of  them  never  returned 

169 


The  Great  Diamond  Hoax 

at  all.  At  last,  the  disciplining  of  Brannan  became  so 
manifestly  an  extra-hazardous  risk  that  it  was  finally 
aI)an(lone(l.  How  he  defied  the  whole  power  of  Mor- 
monism  and  actually  conducted  a  private  and  successful 
war  against  the  church  was  one  of  the  old  romances 
of  the  Pacific  Coast.  In  later  years  Brannan  fell  a 
victim  to  drink,  all  his  enormous  wealth  became  dissi- 
pated and  he  died  penniless  and  forgotten  in  Mexico. 

"Sam"  never  forgot  Salt  Lake  City  or  Utah.  His 
life  would  not  have  been  worth  10  cents  if  he  had  once 
stepped  within  the  territory  of  Brigham  Young.  But 
he  always  cast  longing  eyes  at  the  scene  of  his  early 
struggle.  He  knew  Utah  and  its  resources  from  end 
to  end.  and  in  our  frequent  interviews  often  mentioned 
the  illusive,  "pockety"  nature  of  its  mines.  Therefore, 
when  Ralston  and  I  took  a  30-day  option  on  the  Emma 
mine,  about  40  miles  from  Salt  Lake  City,  I  was  pre- 
pared to  exercise  extreme  caution  in  examining  the 
property. 

The  Emma  mine  had  startled  the  Coast  with  a  won- 
derful burst  of  production,  considering  the  limited 
nature  of  its  plant.  Its  wealth  was  claimed  to  be  fabu- 
lous, and  it  was  a  matter  of  some  surprise  when  its 
owner's  oflfer  to  sell  it  at  the  low  price  of  $350,000  was 
made.  Nevertheless,  the  proposition  seemed  well  worth 
looking  into.  But  remembering  Sam  Brannan's  counsel, 
I  went  unannounced  to  the  mine,  presented  my  cre- 
dentials to  the  superintendent,  who  gave  me  permission 
to  examine  the  property,  although  rather  surprised  that 
I  came  alone. 

It  did  not  lake  nie  long  to  reach  a  conclusion  that  the 

170 


Sam  Brannan  Strikes  It  Rich 

Emma  mine  was  nothing  more  than  a  large  "kidney." 
Considerable  high-grade  ore  had  been  stoped  out  of  the 
upper  levels.  Below,  the  ore  was  plainly  pinching  out. 
The  whole  thing  was  nothing  but  a  shell,  with  just 
enough  in  place  to  fool  a  tenderfoot.  There  was  no 
trace  of  a  fissure  vein.  Any  mining  expert  would  have 
turned   it  down   without  a  moment's   hesitation. 

I  had  just  seen  all  I  cared  to  see  when  J.  W.  Wood- 
man of  Salt  Lake  City,  the  principal  owner  of  the  prop- 
erty, hurried  to  the  mine  in  some  agitation  and  ex- 
pressed his  regret  that  I  had  not  advised  him  of  my 
coming.  However,  he  trusted  everything  was  satisfac- 
tory. I  told  him  courteously  that  I  could  not  pass  fa- 
vorably on  the  mine,  and  to  consider  the  option  closed. 
He  wished  to  argue  the  matter,  but  I  told  him  that  the 
conclusion  was  final  and  decisive.  Then  he  took  another 
tack.  He  was  anxious,  he  said,  to  clean  up  and  get 
away.  If  he  threw  ofif  an  even  htmdred  thousand  dol- 
lars, would  Mr.  Ralston  and  myself  take  over  the  prop- 
erty? Again  I  answered  in  the  negative,  and  told  him, 
in  so  many  words,  that  we  did  not  want  the  mine  at 
any  price. 

As  a  matter  of  fact,  when  it  was  finally  bottomed,  the 
mine  did  not  yield  anything  like  a  hundred  thousand 
dollars  net.     I  even  doubt  if  it  made  both  ends  meet. 

Such  was  the  Emma  mine,  famous,  or  rather  infa- 
mous, in  history.  Just  a  little  later  this  barren  hole  in 
the  ground  figured  in  one  of  the  biggest  swindles  of 
modern  times,  in  which  great  names  were  involved,  a 
minister  of  the  United  States  to  England  disgraced  and 
ruined,  British  investors  robbed  out  of  ten  million  dol- 

171 


The  Great  Diamond  Hoax 

lars,  and  the  business  world  filled  with  such  suspicion 
that  for  many  years  the  doors  of  foreign  credit  were 
barred  against  American  mining  enterprise  of  every 
sort.  The  very  character  of  Americans  for  common 
honesty  was  so  seriously  besmirched  that  it  caused  an 
international  unfriendliness  that  time  only  ]\irtially 
cured. 

It  was  a  fact  of  common  knowledge  that  the  mine 
had  been  bonded  to  Mr.  Ralston  and  myself  for  $v350.- 
000.  It  was  also  well  known  that  I  had  examined  and 
must  have  found  it  unsatisfactory,  for  the  bond  was 
allowed  to  lapse.  This  alone  gave  the  Emma  such  a  black 
eye  on  the  Pacific  Coast,  then  the  great  market  for  legiti- 
mate properties,  that  it  became  almost  a  waste  of  time 
to  make  any  further  attempt  to  market  it  in  the  neigh- 
borhood where  the  circumstances  were  known.  Ralston 
was  rather  noted  for  taking  a  long  chance  on  mining 
ventures,  and  while  his  luck  lasted  he  usually  pulled 
them  through.  Therefore,  when  he  and  his  associates 
turned  down  a  developed  and  going  concern,  the  wise, 
conservative  natures  shook  their  heads.  That  is  doubt- 
less why  the  Emma  was  taken  to  a  market  some  five 
thousand   miles    from    home    for   exploitation. 

In  fact,  it  was  practically  taken  off  the  market  for 
quite  a  while.  After  it  was  first  ofifered  for  sale  to 
Ralston  and  myself,  my  impression  is  that  I  was  the 
only  one  who  examined  it  qualified  to  pass  an  honest 
judgment  on  such  a  property,  until  it  suddenly  blos- 
somed on  the  London  stock  market  as  the  great  Ameri- 
can ophir,  the  newly  discovered  treasure  store,  of 
which   the  human  imagination  had   dreamed    for  ages — 

172 


Sam  Brannan  Strikes  It  Rich 

and  was  unloaded  on  the  I'.ritish  pul)Iic  for  $10,0(J0,000 ; 
or,  to  use  the  parlance  of  our  An^lo-Saxon  cousins,  for 
£2,000,000. 

I  have  gone  into  the  early  history  of  the  luunia  mine 
so  minutely  because  it  strikes  this  narrative  a  little  later 
at  an  angle  so  acute  that  the  two  seem  to  run  parallel, 
and  it  is  necessary  to  have  all  the  facts  in  hand  to 
understand  how  the  great  swindle  that  strained  the 
commercial  friendship  of  two  great  peoples  almost  to 
the  breaking  point  had  a  close  relation  to  the  diamond 
hoax  story. 


173 


CHAPTER  XXII. 

Briton  With  Oriental  Imagination  Seeks  to  Lure 
Investors  With  Tales  of  Mountain  of  Silver. 

iVczc  Promotion  Company  Tells  Truth,  But  Editor  Sam- 
so)i  Frightens  Off  Public  at  Critical  Moment. 

When  I  reached  Salt  Lake  City  after  examining  the 
Emma  mine,  I  found  awaiting  me  a  telegram  from 
Mr.  Ralston  to  the  effect  that  the  president  of  the  Bank 
of  England,  a  Mr.  Green,  then  traveling  in  the  Far 
West,  would  be  in  Cheyenne  on  a  certain  day.  He 
asked  me  to  meet  the  gentleman,  and  in  his  name,  as 
president  of  the  Bank  of  California,  extend  to  the  visit- 
ing banker  any  courtesies  that  his  time  and  inclination 
might  permit.  So  I  journeyed  to  Cheyenne  in  quest  of 
Mr.  Green. 

I  stopped  at  the  principal  hotel  and  one  of  the  first 
persons  my  eyes  rested  on  was  about  the  most  impres- 
sive looking  man  I  ever  saw.  He  must  have  been  six 
feet  six  in  his  stocking  feet ;  he  was  richly  caparisoned, 
handsome,  debonair,  evidently  a  Briton  and  looked  like 
the  president  of  the  Bank  of  England  and  the  Prince  of 
Wales  rolled  into  one.  I  took  a  chance,  approached  the 
stranger  and  asked  him  if  he  were  Mr.  Green,  president 
of  the  Bank  of  England.  The  gentleman  laughed  and 
said  I  had  made  a  close  guess,  but  had  missed  the  mark 
a    trifle.      He    introduced    himself   as    Mr.    Morgan,    an 

174 


Seeks  to   Lure   Investors 

Englishman  of  Icisnre,  making  a  sight-seeing  tour  of 
the  har  West.  Later  I  discovered  that  Mr.  Green  had 
]:)assed  on  without  stopping-  and  was  then  well  along  on 
his  journey  east. 

(  )ne  of  my  objects,  besides  inspecting  the  Emma  mine, 
was  to  examine  a  property  I  had  acquired  in  New 
Mexico  near  the  headwaters  of  the  Gila  river.  I  had 
made  an  investment  on  the  strength  of  huge  outcrop- 
pings  of  mineralized  ledges  that  gave  indications  of  a 
great  mining  property.  iUit  besides  that  there  was  a 
large  valley,  covered  waist  deep  with  grass,  interspersed 
with  black  walnuts  into  which  luxuriant  wild  hops 
twined,  and  traversed  by  a  fine  stream  of  water.  In 
addition  to  the  mining  claims,  I  had  secured  the  water 
rights  and  taken  the  preliminary  steps  to  acquire  a  vast 
acreage  of  fertile  land.  Development  work  had  been 
going  on  for  some  time  and  I  was  anxious  to  see  for 
myself  just  how  the  property  was  showing  up.  I  had 
several  chats  with  Mr.  Morgan  after  our  first  odd 
meeting,  and  learning  of  my  projected  trip  to  New 
Mexico  he  asked  and  readily  received  my  consent  to  go 
along. 

Arrived  at  our  destination,  Mr.  Morgan  at  once  be- 
came infatuated  with  the  country — ledges,  land,  water 
and  all.  Some  of  the  prospect  work  showed  ore  of  high 
values.  The  Englishman  took  many  samples  and  had 
them  tested  by  my  assayer.  My  impression  is  that,  like 
every  beginner  in  the  mining  business,  he  always  chose 
the  best.  Finally,  he  made  me  a  business  proposition. 
He  said  he  had  important  financial  connections  in  Eng- 
land, that  a  great  diversified  property  like  this  could  be 

175 


The  Great  Diamond  Hoax 

floated  for  an  immense  sum — named  $3,000,000  as  a  fair 
estimate,  and  offered  to  form  a  company  on  an  equitable 
basis  to  finance  and  develop  its  resources. 

With  a  cooler  head.  I  advised  Mr.  Morgan  that  the 
mines  were  still  only  in  the  "prospect"  state ;  that  they 
might  turn  out  something  great,  but  more  likely  nothing 
at  all.  Concerning  the  land  and  water,  there  was  no 
question.  Properly  handled  and  developed  their  value 
must  be  great. 

After  some  negotiations,  we  hit  upon  a  bargain. 
Morgan  was  to  go  to  England  post  haste.  I  was  to 
follow  by  more  leisurely  stages,  a  month  later,  and 
by  the  time  of  my  arrival  everything  was  to  be  ar- 
ranged. 

I  stopped  a  few  days  in  New  York  to  see  the  sights. 
While  there  I  met  another  Englishman  by  the  name  of 
Dalton,  a  member  of  Parliament.  I  told  the  gentleman 
something  of  my  contemplated  trip  to  England.  When 
I  mentioned  the  name  of  Morgan,  he  seemed  a  bit 
amused.  He  said  Morgan  was  all  right ;  that  he  had 
excellent  family  connections,  but  that  he  hardly  figured 
as  a  financier.  He  said  that  his  imagination  was  of  an 
oriental  type,  prone  to  exaggeration  and  very  ai)t  to 
make  a  mess  of  any  large  transaction.  "If  Mr.  Morgan 
fails,"  he   added,  "you   had  better  come  to   me."" 

When  I  arrived  in  England,  I  found  that  .Mr.  Dalton's 
]jrcdiction  had  already  come  true.  Morgan  had  issued 
a  prospectus  that  put  the  tales  of  Uaron  ^Munchausen 
in  the  shade.  He  actually  described  the  mines  as  moun- 
tains of  silver,  and  l)y  lu's  ver_\-  extravagance  of  state- 
ment   doomed    the    enterprise    from    the    start.      Mean- 

176 


Seeks  to   Lure   Investors 

while,  I  had  varicnis  meetings  with  Mr.  Dalton,  who 
was  a  man  of  standing-  in  the  hnsiness  world  and 
throngh  him  met  a  great  firm  of  hrokers,  Coates  and 
Hanky.  Mr.  Coates  w^as  the  son  of  a  manufacturer  who 
won  fortune  and  immortaHty  by  his  exploits  in  spool 
cotton.  These  gentlemen  agreed  to  place  my  proposi- 
tion before  the  investing  public.  Morgan  floundered 
around  for  a  short  time  but  was  soon  discouraged.  I 
oiTered  him  an  interest  in  the  new  exploitation,  with  the 
understanding  that   he   keep   mute. 

Coates  and  Hanky  now  undertook  the  enterprise  in  a 
business  fashion.  The  New  Mexico  Land  and  Silver 
Mining  Company  was  formed,  with  a  high  class  direc- 
torate. One  of  the  directors,  I  recollect,  was  a  retired 
admiral  of  the  British  navy.  The  prospectus  was  flat- 
tering enough,  but  would  stand  investigation.  Among 
other  things,  it  dwelt  more  on  the  unquestioned  value 
of  the  land  and  water  than  the  probabilities  and  pos- 
sibilities of  the  mines.  The  capitalization  was  six  hun- 
dred  thousand   pounds. 

The  London  Times  was  then,  as  now,  the  great 
newspaper  authority  of  England.  Its  financial  editor, 
whose  suggestive  name  was  Samson,  was  currently  said 
to  have  more  power  than  the  Queen.  Five  lines  favor- 
able from  Samson's  pen  in  the  financial  columns  of  the 
Times  assured  the  success  of  an  enterprise.  Five  lines 
unfavorable  were  equivalent  to  a  death  warrant.  It 
was  customary  with  promoters  to  submit  their  plans 
to  Air.  Samson  before  submitting  them  to  the  public. 
The  directors  of  the  New?  Mexico  Land  and  Silver 
jMining  Company   followed   this   custom   and   received   a 

177 


The  Great  Diamond  Hoax 

somewhat  cryptic  answer  which,  however,  they  con- 
strued to  he  favorahle. 

The  issue  was  hrought  out  witli  the  skill  of  trained 
hands.  Everything  pointed  to  a  successful  outcome. 
Hut  the  very  next  day,  Samson  came  out  with  a  douhle- 
harreled  l)last.  I'efore  the  Times  reached  the  country. 
a  small  avalanche  of  suhscriptions  poured  in.  I'.ut  in 
the  city,  after  a  large  first  day's  husiness,  the  i)romo- 
tion  fell  flat.  Nevertheless,  the  directors  stood  manfully 
by  their  guns.  They  received  space  in  the  Times  to 
answer.  They  put  up  a  bulldog  sort  of  fight.  The  old 
admiral  in  particular  was  as  belligerent  as  when  he 
paced  a  man-of-war.  There  was  somewhat  of  a  re- 
versal of  public  opinion  in  our  favor.  Alore  than  half 
the  capital  stock  was  subscribed  for  and  we  might 
have  pulled  the  issue  through,  but  it  seemed  to  me 
that  the  company  was  overburdened  to  start  with,  that 
it  must  labor  under  too  many  handicaps  of  distrust  to 
operate  successfully,  and  against  the  judgment  of  the 
directors  I  withdrew  the  properties  and  the  incident  was 
closed.  All  the  subscribers  received  their  money  back, 
without  cost  or  abatement.     Xo  investor  lost  a  cent. 

An  incident  shortly  after  my  arrival  served  to  il- 
lustrate in  a  pleasant  way  my  relations  with  W.  C.  Ral- 
ston at  that  time.  I  was  asked  to  call  at  the  Oriental 
I>ank,  the  agency  for  the  Bank  of  California,  and 
going  there  the  following  day,  was  ushered  into  the 
presence  of  the  president,  an  impressive  looking  man 
of  alTairs.  "I  have  here,"  he  said,  "a  cable  from  W.  C. 
Ralston,  ])resick'nt  of  the  liank  of  Calilornia,  advising 
us  to  give   Mr.   A.    I  larpcnding  credit    for   anv   sum   he 

178 


Seeks  to  Lure  Investors 

wants.  This  is  an  unlimited  order  and  as  you  probably 
intend  to  make  heavy  drafts  on  us,  I  thoug-ht  it  advisable 
to  inquire  beforehand  how  much  you  were  likelv  to 
want."  I  laughed  antl  told  him  I  had  all  the  money 
I  needed,  but  if  I  happened  to  want  accommodation  I 
would  certainly  call  for  more.  The  story  is  immaterial 
in  itself,  e.xcept  as  an  illustration  of  Ralston's  offhand 
way  of  doing  business,  and  his  confidence  in  me  as  his 
friend. 

Another  pleasant  incident  was  the  renewing  of  my 
acquaintance  with  Alfred  Rubery,  who  again  becomes 
a  leading  figure  in  this  story.  He  was  the  same  old 
Rubery  of  the  "Chapman  days."  John  Bright,  his  illus- 
trious uncle,  was  at  the  height  of  his  prestige  and 
power,  and  Rubery  himself  was  in  the  swim  with  the 
biggest  kind  of  social  and  political  fish. 

And  still  another  incident  was  that  I  came  in  personal 
contact  with  the  famous  Baron  Grant,  the  overlord 
of  financial   London. 


179 


CHAPTER  XX III. 

Baron  Grant  Demonstrates  His  Talent  for  Ex- 
ploitation BY  Putting  Over  a  Deal  That  Nets 
$1,500,000. 

Happy  Directors  Decide   TJiat  Occasion   Calls  for   Gen- 
erous Cash   Sonvenirs,  But  Stockholders  Object. 

Those  who  are  famihar  with  the  staid,  conservative, 
even-paced  London  of  to-day  can  hardly  realize  what 
that  same  London  was  in  1871,  the  period  of  my  first 
visit  there.  It  was  the  year  of  the  great  Franco-Prus- 
sian war.  The  pleasure  capital  of  the  world  was  trans- 
ferred from  the  River  Seine  to  the  River  Thames. 
Male  and  female  adventurers  of  every  nation  thronged 
the  British  capital ;  speculators  eager  to  tap  the  great 
reservoirs  of  English  wealth,  gentlemen  who  lived  by 
their  wits,  chevaliers  d'industrie  in  general,  made  Lon- 
don a  common  trysting  place.  And  the  life  was  to  cor- 
respond. It  was  notable  for  undisguised  and  shameless 
intemperance,  a  primitive,  savage,  heathenish  pursuit  of 
women  and  a  fevered  spirit  of  gambling  speculation  that 
cut  loose  from  all  moorings  of  common  sense.  I  could 
compare  it  only  to  the  recklessness  and  abandon  of  a 
Western  mining  camp  in  the  orgy  of  flush   times. 

The  speculative  world  was  ruled  and  controlled  by  a 
strange  character,  for  many  years  one  of  the  famous 
figures  in  Lon<lon,  Baron  Grant,  the  same  man  I  men- 

180 


Baron  Grant  Demonstrates  His  Talent 

tioned  in  the  last  chapter.  He  was  half  Hebrew,  half 
Irish,  and  it  has  been  my  experience  that  wherever  you 
find  that  combination  you  can  look  out  for  something 
different  from  the  common  run.  His  real  name  was 
Gottheimer,  but  he  had  it  changed  by  act  of  Parliament 
to  Alfred  Grant.  He  came  by  his  title  in  a  curious  way. 
When  the  nascent  kingdom  of  Italy,  years  before,  had 
attempted  to  raise  a  considerable  sum  and  had  been 
turned  down  in  the  money  marts  of  Europe,  Grant, 
then  in  the  height  of  his  prestige,  offered  his  services 
and  floated  triumphantly  the  discarded  securities,  for 
which  service  the  grateful  Italian  government  honored 
him  with  the  title  of  baron. 

When  I  first  met  him  Baron  Grant  was  j^ast  his 
zenith.  Some  of  his  transactions  had  been  disapproved 
by  the  great  financiers,  but  he  was  still  a  potent  factor 
in  the  domain  of  speculation  and  a  promoter  without  a 
peer. 

Personally,  he  had  the  magnetic  temperament  more 
highly  developed  than  any  man  I  ever  knew.  His 
manners  were  engaging,  he  was  simply  a  wonder  in 
conversation,  and  as  he  spoke  his  handsome  face  was 
lighted  with  candid  smiles  that  no  one  could  resist. 
Whoever  came  within  the  sphere  of  Baron  Grant's 
influence  felt  the  intoxication  of  his  power  to  charm. 

Meeting  several  times  under  favorable  auspices,  we 
talked  of  the  mines  of  California  and  the  transmissis- 
sippi  region  in  general,  concerning  which  I  could  speak 
with  first-hand  knowledge.  He  was  deeply  interested, 
said  that  such  properties  would  have  a  ready  sale  on 
the    booming    London    market    and    promised    that    if    I 

181 


The  Great  Diamond  Hoax 

could  only  secure  an  option  on  a  high-grade  mining 
proposition,  it  would  prove  a  very  profitable  piece  of 
business  to  both  of  us. 

I  cabled  Mr.  Ralston,  naming  three  well  known  de- 
veloped mines  and  asked  him  to  secure  me  an  option  on 
one  of  them.  In  answer  I  received  a  cable  from  Wil- 
liam M.  Lent,  president  of  the  Mineral  Hill  Silver 
]\Iining  Company,  in  which  I  owned  a  quarter  interest 
myself,  offering  an  option  on  that  property  for  a  mil- 
lion dollars.  Within  a  month  all  the  necessary  papers 
arrived  by  mail.  These  included,  besides  a  legally 
drawn  option,  a  full  description  of  the  property,  its 
productive  history,  maps,  engineer's  reports,  estimates 
of  tonnage  in  sight  and  all  the  details  that  a  careful 
investor  might  require.  In  addition  there  was  a  private 
agreement,  duly  executed,  giving  me  a  commission  of  10 
per  cent. 

It  certainly  was  an  alluring  proposition.  The  Mineral 
Hill  mine  was  located  in  eastern  Nevada.  Traveling  on 
the  Narrow  Gauge  Railroad,  from  the  Palisades,  a  sta- 
tion on  the  Southern  Pacific,  to  Eureka,  you  can  still 
see  the  ruins  of  its  plant.  It  was  a  sulphide  ore  that 
required  preliminary  roasting  and  then  became  tractable 
and  free.  Besides  the  furnaces,  the  equipment  consisted 
of  only  a  20-stamp  mill.  Yet  the  ore  was  of  so  high 
grade  that  the  gross  production  had  reached  the  enormous 
total  of  $150,000  in  a  single  month.  Much  of  the  ground 
\\as  totally  unexplored,  though  promisiiig. 

Baron  Grant  laid  out  his  promotion  with  his  consum- 
mate skill.  He  possessed  a  complete  knowledge  of  the 
investing   iniblic.      At    that    time — and    probably    still — 

182 


Baron  Grant  Demonstrates  His  Talent 

investors  and  speculators,  as  a  rule,  confined  themselves 
to  a  single  line.  One  dabbled  in  coal,  another  in  iron 
mines,  another  in  silver  mines,  another  in  gold  mines 
and  so  on  down  the  line.  Informed  of  the  specialty  of 
each,  the  astute  baron  knew  exactly  where  to  go  for 
customers,  and  never  wasted  time.  The  plans  provided 
for  an  issue  of   £600,000  of  common  stock  and   £300,- 

000  of  debenture  bonds,  the  latter  to  be  used  for  a 
plant  to  quadruple  production. 

The  enterprise  was  ably  advertised  and  this  time 
Samson  was  tractable  and  kind.     Interest  was  keen,  but 

1  think  even  Baron  Grant  was  rather  surprised  at  what 
followed.  When  the  books  were  opened  there  was  a 
crush  to  get  on  board,  and  when  we  had  a  chance  to 
assemble  figures  everything  had  been  gobbled  up  and 
the  stock  twice  oversubscribed.  Our  net  profit  was 
£300,000,  or,  in  American  money,  $1,500,000. 

I  had  several  experiences  in  the  easy-money  line,  but 
this  put  them  all  in  the  shade.  I  was  confident  that  my 
mission  in  life  was  to  place  American  mining  securities 
on  the  London  market.  Baron  Grant  and  myself  en- 
tered into  a  written  agreement.  I  was  to  secure  options 
on  high-class  mining  properties.  I  had  in  mind  the 
Raymond  &  Ely,  North  Bloomfield,  Eureka  Consolidated 
and  Zellerbach  mines.  Grant,  on  his  part,  agreed  to 
handle  no  other  mining  properties  but  mine.  With  this 
understanding,  I  did  not  even  wait  for  the  Mineral  Hill 
melon  cutting,  but  set  out  post-haste  for  San  Francisco 
to  lay  in  a  new  stock  of  options  for  the  foundation  of 
wealth  beyond  the  dreams  of  avarice. 

The  news  of  my  success  in  placing  the  Mineral    Hill 

183 


The  Great  Diamond  Hoax 

mine  in  London  had  made  quite  a  stir  in  my  home  town 
and  1  was  deluged  with  offers  of  mining  properties, 
good  and  bad.  Quite  a  jubilee  occurred  when  the  first 
half  million  dollars  on  account  of  the  purchase  price  for 
Mineral  Hill  was  made  payable  at  the  Bank  of  Cali- 
fornia. The  directors  of  the  company  were  so  enthusi- 
astic that  they  voted  themselves  $5000  each  as  a  "souve- 
nir" and  added  a  "souvenir"  of  $25,000  for  the  presi- 
dent. The  other  $500,000  arrived  in  due  season,  but  the 
sordid  stockholders,  who  seemed  singularly  devoid  of 
imagination,  objected  so  strongly  to  "souvenirs"  that 
this  feature  of  the  celebration  was  overlooked. 

I  had  no  difficulty  at  all  in  securing  options  on  several 
of  the  most  assured  mining  properties  of  California  and 
the  Pacific  Slope.  From  these  alone  I  figured  to  make 
millions,  judging  by  the  history  of  Mineral  Hill.  Figur- 
ing on  a  prolonged  stay  abroad,  I  broke  up  my  residence 
in  San  Francisco,  gave  IMaurice  Dore  a  power  of  at- 
torney to  manage  my  local  interests,  and  left  with  my 
family  for  London,  to  change  paper  into  gold. 


184 


CHAPTER  XXIV. 

Baron  Grant  Demands  More  Time,  Thereby  Knock- 
ing Out  Option  for  Mine  That  Soon  Developed 
Bonanza. 

Exploiter  Breaks  His  Froiitisc  and  Litigation  Follozes; 
Public  Fooled  Into  Buying   Jl'orthless  Securities. 

I  returned  to  London  as  soon  as  my  business  was  ar- 
ranged in  San  Francisco.  The  boom  times  were  still 
on.  Speculation  was  running  mad.  I  was  a  tritie 
chagrined  at  losing  the  best  property  I  had  bonded 
through  the  stubbornness  of  Baron  Grant.  This  was 
the  famous  Raymond  and  Ely  mine.  By  the  payment  of 
$10,000  I  had  secured  an  option  on  this  famous  property 
for  sixty  days  for  $900,000.  I  had  cabled  Grant  about 
Raymond  and  Ely,  in  order  to  hasten  arrangements, 
as  the  time  was  short.  He  answered  that  nothing 
short  of  90  days'  option  should  be  considered.  I  tried 
to  secure  an  extension,  but  was  turned  down.  While 
we  were  see-sawing  over  this  and  time  was  slipping  by, 
the  company  offered  to  return  my  $10,000  and  let  the 
option  drop.  Under  the  conditions,  I  accepted  the 
tender.  Just  a  week  later  the  Raymond  and  Ely  bo- 
nanza was  uncovered,  yielding  millions  in  dividends. 
After  that  no  one  could  purchase  it  at  any  price. 
Whether  the  owners  really  knew  anything  about  this 
tremendous  ''strike"  when  they  so  generously  tendered 

185 


The  Great  Diamond  Hoax 

me  the  return  of  my  $10,000  deposit  the  reader  can 
guess  as  well  as  I. 

But  that  was  a  small  matter,  I  had  so  many  shots 
in  my  locker.  Among  these  was  the  famous  North 
I>loomfiel(l  hydraulic  mine.  I  had  an  option  on  it  for 
$600,000.  In  my  judgment,  which  afterwards  came 
true,  it  was  worth  at  least  five  times  as  much.  One  of 
the  principal  owners,  Samuel  F.  Butterworth,  followed 
me  to  England.  Talking  of  Baron  Grant  and  his  power 
of  fascination,  I  introduced  him  to  Butterworth,  who 
was  an  able  man,  but  cold  and  unemotional  as  fate,  and 
after  a  ten  minutes'  talk  the  Baron  had  him  spellbound. 
"There  never  was  a  human  being  like  him,"  said  llutter- 
vvorth  as  we  retired. 

Baron  Grant  was  measurably  glad  to  see  me,  but 
not  so  cordial  as  the  circumstances  led  me  to  expect. 
I  spoke  to  him  about  the  North  Bloomfield  mine  and 
my  desire  to  have  the  proposition  laid  before  the  public 
without  unnecessary  delay,  but  he  seemed  singularly 
backward.  At  last  the  cat  escaped  from  the  bag.  He 
had  violated  his  written  contract  by  agreeing  to  bring 
out  another  mining  exploitation,  ahead  of  mine.  But 
my  indignation  at  his  absolute  lack  of  faith  was  nothing 
compared  with  my  astonishment — almost  horror — when 
he  told  me  that  the  property  he  proposed  to  unload  on 
the  British  public  for  a  million  pounds  sterling  was 
none  other  than  the  Emma  mine. 

I  liad  no  desire  to  continue  business  relations  with  a 
man  who  had  shown  himself  so  utterly  without  faith ; 
Ijut  1  was  at  some  pains  to  explain  tlie  folly  of  his 
project   from   a  mere   practical   standpoint,   setting  com- 


Baron  Grant  Demands  More  Time 

mon  honesty  to  one  side.  I  told  Baron  Grant  that  I  was 
famihar  with  the  Emma  mine,  that  Mr.  Ralston  and 
myself  had  recently  held  an  option  on  the  property  for 
$350,000;  that  I  had  personally  inspected  the  property 
and  found  it  a  nearly  worked  out  "kidney" ;  that  the 
principal  owner  had  later  ofifered  it  to  me  for  $250,000 ; 
that  I  considered  it  dear  at  any  price.  In  conclusion,  I 
urged  that  to  promote  such  a  fraudulent  concern  for  a 
huge  sum  would  not  only  cause  a  scandal  of  far-reach- 
ing proportions,  but  would  also  ruin  the  market  for 
American  securities  for  many  years  to  come. 

Baron  Grant  listened  coldly.  He  said  he  had  every 
confidence  in  the  Emma  mine  and  those  behind  it. 
That  the  proposition  had  been  brought  to  England  by 
Trenor  VV.  Park,  a  New  York  financier,  once  of  Cali- 
fornia ;  that  it  was  vouched  for  by  such  men  of  promi- 
nence as  Senator  William  M.  Stewart  of  Nevada  and 
by  the  American  Minister,  General  Robert  Schenck. 
He  had  no  fear  of  a  mine  guaranteed  by  such  weighty 
names.  As  for  my  own  properties,  he  said  he  would 
take  them  up  when  his  convenience  suited.  Otherwise, 
he  possessed  the  power  to  prevent  any  other  interest 
floating  them.     The  interview  ended  in  a  violent  quarrel. 

Even  when  I  demanded  my  share  of  the  profits  in 
the  Mineral  Hill  deal.  Baron  Grant  held  me  off  with 
specious  promises  of  speedy  settlement,  then  flatly  re- 
fused to  settle  at  all.  By  this  time  we  were  sworn 
enemies.  I  brought  an  action  for  the  recovery  of  a 
hundred  and  fifty  thousand  pounds,  $750,000  of  our 
money.  The  Baron  harassed  me  with  the  usual  legal 
impediments,   but   in   the   end,   I   may   say   here,   that    I 

187 


The  Great  Diamond  Hoax 

gained  a  judgment  and  what  was  more  important  still, 
collected   the  amount  sued   for  in   full. 

I  sought  new  outlets  for  my  mining  properties,  among 
the  highest  financial  circles  of  England,  not  by  means 
of  stock  exchange  exploitation  but  by  sales  to  intelli- 
gent and  ])rovidcnt  investors.  The  North  Bloomfield 
mine  was  well  and  favorably  known  in  England.  One 
of  its  owners  was  Tom  Bell,  an  English  resident  of  San 
I-rancisco,  who  cut  a  large  figure  in  the  old  days.  I  had 
actually  arranged  the  complete  details  of  the  sale  of  this 
property  for  four  hundred  thousand  pounds.  A  meet- 
ing was  held  to  confirm  the  transaction  and  pay  in  half 
the  purchase  price,  when  an  unfortunate  remark  of  Mr. 
Butterworth  caused  a  halt.  He  said,  doubtless  in  good 
faith,  that  no  English  manager  was  capable  of  handling 
a  California  hydraulic  mine.  But  this  so  offended  some 
of  the  principal  English  investors  that  they  quietly 
withdrew. 

In  the  meanwhile,  the  Emma  mine  promotion  was 
brought  out  with  a  grand  blare  of  trumpets.  Immense 
sums  were  spent  in  wholesale  advertising.  The  most 
dazzling  and  seductive  literature  was  scattered  broadcast 
through  the  length  and  breadth  of  the  United  Kingdom. 
Its  fabulous  wealth  was  described  in  the  vivid  language 
that  fires  the  s])eculative  spirit  latent  in  every  man  and 
in  most  women.  S])ecial  stress  was  laid  on  the  eminent 
station  of  the  American  backers.  I  have  seen  much 
lurid  get-rich-cjuick  literature  of  our  own,  at  a  time 
when  the  industry  of  plucking  the  ]ml)lic  was  unchecked 
and  in  full  bloom,  but  nothing  that  took  rank  with  the 
effrontery  em])loyed  to  l^olster  u])   tliis   brazen    fraud. 

188 


Baron  Grant  Demands  More  Time 

Of  course,  the  promotion  was  a  hn^^e  success.  When 
the  subscription  books  were  opened  a  small  river  of 
gold  poured  in  from  applicants  for  shares.  "Jlie  issue 
was  enormously  over-subscribed.  Baron  Grant  and  his 
associates  selected,  as  far  as  possible,  the  smaller  class 
of  investors.  These  are  less  able  to  roar  in  an  ef- 
fective manner  when  the  inevitable  day  of  reckoning 
comes    for   every   crooked    deal. 

The  Emma  mine  was  regularly  listed  on  the  London 
stock  exchange,  alongside  of  reputable  and  conservative 
companies.  It  became  the  feature  of  a  tremendous 
gamble.  Tn  the  hands  of  expert  market  manipulators, 
the  stock  ebbed  and  flowed  like  the  tide.  Stories  of 
fabulous  dividends  were  passed  from  moutli  to  mouth 
and  the  stock  soared  from  one  high  level  to  another  till 
ten  pound  shares  touched  thirty-two  pounds.  This  abso- 
lutely valueless  and  exhausted  property  had  a  paper 
value  of  $16,000,000.  When  it  shrank  under  profit 
taking  and  selling  pressure,  reports  of  new  strikes,  vast 
ore  bodies  uncovered,  sent  the  prices  booming  once 
more.  Had  it  not  been  for  the  utter  heartlessness  of 
the  thing,  one  could  almost  admire  the  skill  with  which 
a  huge  deception  was  organized  and  kept  alive. 

Of  course,  I  shouted  "murder"  from  the  housetops.  I 
publicly  denounced  the  Emma  mine  as  an  exhausted, 
worthless  hole  in  the  ground.  It  was  like  a  voice  raised 
in  the  wilderness.  No  one  paid  the  least  attention  to 
my  warnings  in  the  midst  of  the  bawling  crowd.  I  was 
classified  either  as  a  general  calamity  howler  or  as  the 
leader  of  a  ''bear"  faction,  anxious  to  organize  a  "bear" 
raid  and  interrupt  the  wave  of  prosperity.     At  length,  to 

189 


The  Great  Diamond  Hoax 

gain  a  larger  audience  and  put  my  statements  in  re- 
sponsible form,  I  made  an  effort  in  a  new  field  of  en- 
deavor ])}•  founding  the  London  Stock  Exchange  Re- 
view. 


190 


CHAPTER  XXV. 

Inspired  by  Desire  to  Expose  Emma  Mine  Swindle 
Author  Begins  Publication  of  Financial  Journal. 

Ralston  Reports  Discoi'cry  of  Iniincnse  Diamond  Field 
and  Declares  His  Find  is  Worth  $^0,000,000. 

Many  times  I  had  learned  to  have  a  deep  respect  for 
printer's  ink.  I  had  seen  it  make  history,  change  for- 
tune, influence  the  thought  of  great  bodies  of  people, 
prove  a  mighty  instrument  for  good  or  ill.  Without  the 
least  desire  to  be  disrespectful  to  the  present,  I  have  a 
strong  impression  that  the  journalism  of  fifty  years 
ago  had  a  wider  dominion  over  the  minds  of  its  readers 
than  the  modern  school.  T  cannot  say  that  this  was 
always  for  the  best.  Men  had  a  blind  devotion  to  their 
pet  newspapers  that  amounted  to  something  very  much 
akin  to  bigotry.  Such  newspapers  were  the  final  au- 
thority on  everything  from  religion  to  politics,  and 
everyone  who  questioned  their  opinions,  politics  or 
statements  had  a  fair  prospect  for  a  fight.  Thus  when 
an  editor  fell  into  some  grievous  error  he  was  certain 
to  pull  nearly  all  of  his  subscribers  into  the  same  abyss. 

So  I  realized  that  to  have  any  influence  in  my  new 
place  of  business,  to  attack  the  power  of  Baron  Grant, 
now  bitterly  antagonistic  in  every  way,  and  to  ofifset 
the  Emma  mine  fraud,  I  must  have  a  personal  organ. 
For  this  purpose,  I  established  a  financial  weekly  paper 

191 


The  (jreat  Diamond  Hoax 

known  as  the  London  Stock  l^xchange  Review.  It  was 
issued,  for  apparent  reasons,  ostensibly  liy  a  brokerage 
firm,  but  it  was  an  open  secret  that  the  pubHcation  was 
mine.  I  engaged  an  able  editor-in-chief,  and  directed 
him  to  employ  the  best  financial  writers  in  England, 
giving  eacli  his  proper  department,  such  as  railroad 
securities,  industrial,  mining  shares,  foreign  and  domes- 
tic loans  and  the  like.  I  retained  a  page  for  which  I 
furnished  material  hot  enough  to  burn  holes  in  an 
asbestos  blanket.  The  page  was  devoted  to  the  I'juma 
mine  and  Baron  Grant. 

The  Stock  Exchange  Review  was  a  breezy,  well- 
written  sheet,  full  of  valuable  information  to  investors, 
])ut  together  in  an  attractive,  readable  form.  I  had 
set  aside  £6,000  to  pay  the  losses  of  the  venture. 
Much  to  my  surprise  and  pleasure,  it  proved  a  money- 
maker from  the  start.  The  style  was  such  a  departure 
from  the  ordinary  dry-as-dust  publications  of  its  kind 
that  it  made  a  hit  on  the  street  with  the  first  issue. 
The  price  was  a  shilling,  but  often  big  premiums  were 
offered  when  it  came  out  with  an  extra  seasoning  of 
tabasco. 

I  had  reason  to  know  that  it  tickled  the  hide  of 
Baron  Grant  unpleasantly.  It  managed  to  hit  on  a 
number  of  raw  spots  in  his  past  career,  and  in  partic- 
ular interfered  with  the  Emma  mine  proceedings.  While 
I  spoke  as  a  private  person,  my  charges  might  be  dis- 
regarded, but  when  a  publication,  reasonably  responsil)le 
in  damages  and  absolutcK-  resi)onsible  in  a  criminal 
charge,  made  a  downright  allegation  oi  fraud,  that  was 
r|nite    another   tiling.      'Vhv   libel    laws   of    l^ngland    were 

192 


Establishes  Financial  Journal 

then,  as  now,  airtight.  It  was  not  a  jocular  affair  to 
call  anyone  a  thief  in  print,  and  those  who  did  not 
seek  redress  had  to  suffer  under  the  suspicion,  just  or 
unjust,  that  the  accusation  was  substantially  true.  The 
Emma  mine  was  brought  out  in  two  sections,  for  pro- 
moting each  of  which  Baron  Grant  received  a  com- 
mission of  £100,000.  When  the  first  section  was 
issued  it  almost  took  a  squad  of  policemen  to  keep 
back  the  crowd  of  investors.  The  second  appeared  just 
after  the  Stock  Exchange  Review  began  to  hammer. 
While  the  stock  was  taken,  the  promotion  staggered 
and  was  never  quite  itself  again.  One  thing  it  pre- 
vented absolutely — the  declaring  of  a  great  dividend — 
on  air — which  would  have  sent  the  stock  skyward  like 
a  rocket.  The  managers  had  determined  on  tliis  piece 
of  rascality,  but  doubtless  fearing  that  I  had  certain 
knowledge  of  the  fact  that  not  a  dollar's  worth  of  pre- 
cious metal  had  been  produced,  this  particular  piece  of 
villainy  was  reluctantly  abandoned. 

In  the  meanwhile,  I  began  to  have  suspicions  of  the 
integrity  of  Samson,  the  financial  editor  of  the  London 
Times.  I  could  not  think  he  was  ignorant  of  what 
was  going  on  in  the  Emma  mine  deal.  His  attitude 
toward  several  shady  promotions  looked,  to  say  the 
least,  queer.  In  the  days  of  our  intimacy  Baron  Grant 
had  more  than  once  broadly  intimated  that  he  pos- 
sessed some  kind  of  mysterious  hold  on  Samson.  When- 
ever I  suggested  Samson's  name  as  a  possible  factor  in 
our  enterprises  he  always  said  smilingly,  "He'll  be  all 
right."      For    some    time    previous    I    had    a    passionate 

193 


The  Great  Diamond  Hoax 

yearnini^  to  get  a  look  at  the  financial  writer's  bank 
accoimt. 

I  communicated  this  desire  to  Alfred  Rubery  one  day, 
just  as  the  expression  of  a  wish.  Rubery,  who  knew 
all  the  ropes  and  all  the  ins  and  outs  of  London,  pon- 
dered a  few  moments  and  said  he  thought  it  might  be 
arranged.  I  was  overjoyed  at  this  intimation,  but 
could  not  exactly  see  how.  though  my  friend  had  an 
odd  way  of  doing  things  seemingly  impossible,  in  an 
everyday  fashion.  He  was  of  an  impulsive  character,  a 
most  loyal,  trusty  and  affectionate  friend,  yet  nothing 
on  earth  could  ever  jar  him  out  of  his  marvelous  Brit- 
ish self-possession.  I  remember  one  occasion  in  San 
Francisco  in  the  old  Chapman  days,  when  Rubery  and 
I  were  present  at  a  certain  meeting,  when  a  wholesale 
slaughter  was  on  the  point  of  taking  place.  Just  at 
the  crisis  I  happened  to  glance  at  Rubery.  He  was 
sitting  in  his  chair  wdth  a  bored,  blase  expression  on 
his  face,  as  if  tragedies  were  so  commonplace  in  his 
life  that  they  lacked  interest  and  were  positively  weari- 
some. This  incident  has  nothing  to  do  with  the  story 
further  than  to  illustrate  the  singular  character  of  the 
man— a  mixture  of  dash  and  enthusiasm  under  strong 
control. 

At  that  time  money  could  accomplish  almost  any- 
thing in  England.  A  few  evenings  after  our  conversa- 
tion, I\Ir.  Rubery  waited  on  me  at  my  rooms,  accom- 
panied by  a  dapper  looking  person,  whom  he  introduced 
as  an  official  of  the  Bank  of  England,  who  had  access 
to  the  accounts  kept  there  b}-  'Sir.  Samson  and  who  was 
willing   for   a    reasonable    compensation    to   give   me   all 

194 


Establishes  Financial  Journal 

the  information  concerning  the  same  I  might  desire.  7'o 
which  pleasing  presentation  the  official  of  the  I!ank  of 
England  gravely  bowed. 

Some  conversation  folhjwed  as  to  the  terms  and  con- 
ditions. The  official  wanted  all  that  was  coming,  but 
evidently  did  not  wish  to  scare  ofif  a  good  customer  by 
an  extravagant  price.  At  last  he  got  down  to  a  cold 
cash  proposition.  Would  I  consider,  under  all  the  cir- 
cumstances,   £500  excessive   for  so   delicate   a   service? 

A  bargain  was  struck  readily  enough.  Much  better 
terms  would  have  been  cheerfully  granted.  The  con- 
tracting party  underestimated  his  hand. 

Through  this  person  I  secured  an  accurate  state- 
ment of  Mr.  Samson's  transactions.  I  even  was  shown 
checks  and  cross  checks,  which  I  photographed  for  fu- 
ture use.  These  proved  beyond  all  question  that  Mr. 
Samson  was  a  beneficiary  of  the  Emma  mine  promo- 
tion, that  he  had  profited  largely  by  other  deals,  and, 
in  short,  was  faithless  to  the  trust  of  his  employer, 
and  trading  on  that  trust. 

Here  loomed  up  the  outlines  of  a  great  dramatic  sit- 
uation, the  unmasking  of  a  conspiracy,  the  righting  of 
many  wrongs,  by  which  the  villain  of  the  play  would 
be  confounded  and  the  innocent  come  to  their  own. 
Only  the  details  needed  rounding  out  to  clear  the  at- 
mosphere and  let  the  curtain  fall. 

I  was  deeply  engaged  in  these  great  affairs  when  I 
received  a  cable  from  Mr.  Ralston.  It  was,  in  fact,  a 
letter.  At  the  cable  rates  then  in  force,  it  cost  over 
$1,100.  When  I  read  it  T  felt  assured  that  my  old 
friend  had  gone  mad. 

195 


The  Great  Diamond  Hoax 

It  told  me  of  a  vast  diamond  field  just  discovered  in 
a  remote  section  of  the  United  States.  His  description 
of  it  made  Sinbad,  the  Sailor,  look  like  a  novice.  He 
said  that  diamonds  of  incalculable  value  could  be  gath- 
ered in  limitless  quantities  at  nominal  expense ;  that 
they  could  be  picked  up  on  the  ant  hills ;  that  at  a  low 
estimate  it  was  a  $50,000,000  proposition ;  that  he  and 
George  D.  Roberts,  a  well-known  mining  man,  were  in 
practical  control.  Finally  he  almost  demanded  that  I 
should  drop  everything,  take  the  next  steamer  and  act 
as  general  manager. 

The  extravagance  of  his  language  alone  seemed  to 
me  to  indicate  that  he  was  laboring  under  some  strange 
delusion.  However,  diamonds  or  no  diamonds,  I  was 
in  no  position  to  stir.  I  cabled  him  briefly  that  my 
business  in  London  was  of  too  vital  importance  to  admit 
of  considering  other  engagements. 

But  that  did  not  satisfy  Ralston  at  all.  Cable  fol- 
lowed cable,  urging,  imploring,  beseeching  me  to  come 
on,  which  were  invariably  answered  in  the  same  way. 
Still  I  was  worried  and  perplexed.  Rumors  began  to 
float  into  London  about  the  discovery  of  a  vast  diamond 
field  in  the  American  continent,  controlled  by  the  great 
California  banker,  W.  C.  Ralston.  Many  financiers 
called  on  me  for  information,  knowing  our  relations. 
Among  others.  Baron  Rothschild  sought  an  interview. 
He  asked  me  what  I  knew  about  the  diamond  fields,  and 
I  frankly  showed  him  Mr.  Ralston's  cables.  He  read 
them  with  interest  and  asked  me  what  I  thought  myself. 
I    told   him    that   while   I   had   great   confidence   in    Mr. 

196 


BARON    ROTHSCHILD 

Head   of  the  great  financial    institution 

in    England    in    1872 


Establishes   Financial  J(3urnal 

Ralston,  I  thouglit  he  must  have  been  imposed  u])on  in 
some  way,  and  that  in  due  season  the  bubl^le  would  burst. 

Baron  Rothschild  mused  a  moment.  "Do  not  be  so 
sure  of  that,"  he  said.  "America  is  a  very  large  coun- 
try. It  has  furnished  the  world  with  many  surprises 
already.  Perhaps  it  may  have  others  in  store.  At  any 
rate,  if  you  find  cause  to  change  your  opinion,  kindly 
let  me  know." 

This  remark,  made  by  perhaps  the  keenest  financier 
in  the  world,  was  enough  to  set  any  one  thinking  hard. 

My  position  was  one  of  extreme  difihculty.  The  most 
important  engagements  of  my  life  demanded  my  pres- 
ence in  London.  Of  course  I  knew  that  in  my  absence 
everything  must  mark  time.  But  little  by  little  the  im- 
pression began  to  grow  on  me  that  Mr.  Ralston  had 
actually  captured  a  fifty  million  dollar  financial  circus 
and  that  I  was  badly  needed  as  ringmaster.  His  cables 
did  not  deal  in  hopes,  but  absolute  certainties — assured 
facts.  The  diamonds  were  not  a  dream — a  small  for- 
tune of  them  taken  from  an  insignificant  trench  were 
already  in  his  possession.  Finally  came  a  cable  beg- 
ging me  to  go  to  California,  if  only  for  the  briefest 
stay,  say  sixty  or  ninety  days. 

I  had  engaged  ofBces  in  London  for  seven  years.  I 
could  see  ahead  a  vast  future  of  activity  and  success, 
and  I  did  not  want  my  selected  career  broken  into  by 
outside  distractions,  however  brief.  But  I  commenced 
to  take  the  appeals  of  Mr.  Ralston  more  seriously. 
Casual  expressions  of  opinion  such  as  the  one  noted  by 
Baron  Rothschild  began  to  stir  up  my  imagination  a  bit. 
Could   it   really   be   true   that   there   was   a  place   where 

199 


The  Great  Diamond  Hoax 

diamonds  could  be  picked  up  on  ant  hills  ?  It  was  very 
easy  to  find  out  the  truth,  and  if  the  truth  happened  to 
correspond  with  Mr.  Ralston's  statements,  then  every- 
thing else  in  the  world  in  the  way  of  business  or  en- 
terprise seemed  commonplace  and  cheap. 

I  laid  the  matter  before  Alfred  Rubery,  who  usually 
had  a  level  head.  He  was  surprised  at  my  reluctance. 
"You  have  your  men  safely  trapped  here,"  he  said. 
"There  is  no  possibility  of  escape,  and  whether  they 
enjoy  for  a  brief  time  a  sense  of  fancied  freedom,  mat- 
ters not  in  the  least.  Make  up  your  mind  to  go  to  Cali- 
fornia and  find  out  what  all  this  cable  correspondence 
means.  Personally,  I  am  bored  to  death,  just  pining 
for  a  little  bit  of  excitement.  I  will  go  along  with  you 
and  we  will  stir  up  things  again  in  the  Far  West." 

Pressure  came  on  every  side.  I  must  have  had  a 
forewarning  of  disaster  to  have  hesitated  so  long,  but 
finally  I  gave  way  to  forces  that  seemed  like  fate.  I 
cabled  Ralston  that  I  would  be  at  his  service  for  a  brief 
period,  but  that  the  proceedings  must  be  short  and 
sweet.  Also  I  made  a  hurried  arrangement  of  my  af- 
fairs in  London,  thinking  to  take  up  the  thread  again 
in  three  months  at  most.  Rubery  was  rejoiced  at  my 
decision,  and  prepared  to  go  along.  We  turned  our 
backs  on  London,  stayed  not  on  the  order  of  our  going 
when  we  reached  New  York,  and  as  fast  as  steamships 
and  railroads  would  carry  us,  arrived  in  San  Francisco 
some  time  during  the  month  of  May,  1872,  prepared  to 
uncover  the  greatest  diamond  field  in  the  world  or  re- 
turn whence  we  came  with  equal  expedition. 


200 


CHAPTER  XXVI. 

Discoverers  Decline  to  Reveal  Location  of  Dia- 
mond Field,  But  Report  of  Agent  Satisfies  Pro- 
moters. 

Pinal  Proof  of  Good  Faith  Is  Offered  in  Porm  of 
Bag  Pilled  With  Collection  of  Pye-Dazding  Gems. 

When  I  arrived  in  San  Francisco  I  lost  no  time  in 
getting-  in  touch  with  the  principals  of  the  diamond 
deal.  Three  prominent  men  only  were  concerned  in  it 
at  that  time,  W.  C.  Ralston,  George  D.  Roberts  and 
William  M.  Lent.  From  them  I  learned  that  the  alleged 
discovery  of  the  diamond  fields  had  been  known  to 
them  for  many  months.  Two  prospectors,  Philip  Ar- 
nold and  John  Slack,  were  the  original  locators.  I  had 
known  Arnold  previously  in  California.  He  had  been 
employed  by  Roberts  to  look  into  mining  properties  in 
the  western  country.  The  later  story  that  he  had  once 
been  employed  by  myself  in  a  like  capacity  was  abso- 
lutely false.  Slack  I  had  known  as  a  plain  man  about 
town,  of  general  fair  repute. 

As  an  earnest  of  the  great  value  of  the  fields,  the 
gentleman  had,  as  near  as  I  can  recollect,  a  large  quan- 
tity of  rough,  uncut,  brilliant-looking  stones  which  they 
said  local  experts  had  pronounced  diamonds  of  an  esti- 
mated value  of  $125,000.  Among  them  were  several 
magnificent    reddish-colored    stones,    said    to    be    rubies. 

201 


The  Great  Diamond  Hoax 

Moreover,  they  claimed  that  the  cHscoveries  had  been 
verified  to  an  extent  sufficient  to  satisfy  themselves. 

The  story,  previous  to  my  arrival.  I  only  know  by 
hearsay  and  I  cannot  vouch  for  every  detail  of  things 
beyond  my  personal  experience  that  happened  forty 
years  ago.  But  as  nearly  as  I  can  recall  the  narrative, 
as  it  was  related,  the  main  facts  were  these : 

One  day.  in  the  year  1871,  when  I  was  in  Europe, 
two  weather-beaten  men,  looking  like  typical  miners, 
presented  themselves  at  the  Bank  of  California  and 
arranged  to  deposit  property  of  great  value  for  safe 
keeping.  The  property  proved  to  be  nothing  more  than 
some  handsome-looking  stones  which  they  said  in  ex- 
planation were  diamonds,  of  which  they  had  discovered 
a  great  store,  in  the  desert  section  of  the  West.  They 
were  given  a  receipt  for  their  valuables  and  quietly  took 
their  leave.  But,  of  course,  in  those  days  of  mad  ex- 
citement and  crazy  speculation,  such  an  incident  was 
bound  to  leak.  George  D.  Roberts  located,  in  his  old 
prospector  Arnold,  one  of  the  fortunates,  and  introduced 
him  to  Ralston  and  Lent.  Arnold  was  always  the 
spokesman,  the  negotiator,  in  these  early  transactions. 
Slack  merely  was  present  and  acquiesced.  At  first  the 
men  were  exceedingly  coy  and  cautious,  had  all  the 
manner  of  a  couple  of  simple-minded  fellows  who  had 
stumbled  on  something  great  and,  bewildered  with  their 
good  fortune,  were  simply  afraid  to  trust  anyone  with 
the  momentous  secret.  They  declined  to  give  the  slight- 
est indication  of  the  locality  of  the  fields,  or  left  the 
impression  that  they  were  distant  a  thousand  miles,  or 
thereabouts,    from    the   actual    spot.      Relying   on    vague 

202 


Decline   to   Reveal   Diamond   Field 

liints,  several  parties  actually  set  out  for  Arizona  to 
locate  the  new  Golconda.  At  the  outset  the  men  re- 
fused to  part  with  their  rights,  except  to  the  extent  of 
a  small  interest,  and  only  then  for  a  large  sum  of  money 
which  they  asserted  was  necessary  to  secure  claims  to 
a  very  large  territory. 

Later,  however,  they  became  more  amenable  to  reason. 
They  were  willing  to  part  with  a  half  interest  to  gen- 
tlemen in  whom  they  had  such  implicit  conhdence. 
When  it  was  pointed  out  to  them  that  negotiations 
were  impossible,  unless  the  location  of  the  mines  was 
indicated  and  some  kind  of  an  inspection  allowed,  they 
offered  a  rather  strange  arrangement,  which,  however, 
seemed  fair  enough  on  its  face.  By  its  terms  they 
agreed  to  conduct  two  men,  to  be  selected  by  Ralston 
and  Roberts,  to  the  diamond  fields,  and  allow  them  to 
satisfy  themselves  of  the  general  nature  of  the  find,  but 
with  this  proviso :  that  these  representatives,  after  reach- 
ing the  wild,  uninhabitable  country,  must  submit  to  being 
blindfolded,  both  going  and  coming  back.  These  condi- 
tions were  agreed  to  and  such  an  expedition  was  act- 
ually made.  I  am  not  certain,  but  my  impression  is 
that  David  D.  Colton  was  one  of  the  two  investigators, 
being  selected  by  Mr.  Ralston  as  a  peculiarly  level- 
headed man  of  large  practical  experience.  However 
that  may  be,  the  mines  were  certainly  visited  and  dis- 
played, more  diamonds  were  unearthed,  and  the  party 
returned  with  the  most  rose-colored  reports  of  the  gen- 
uineness of  the  properties  and  their  fabulous  richness. 
It  was  this  report  that  set  Ralston  and  his  associates 
wild. 

203 


The  Great  Diamond  Hoax 

I  had  some  knowledge  of  the  prospectors.  Arnold 
generally  had  borne  a  good  reputation  among  the  mi- 
ning fraternity.  Slack  seemed  to  be  a  stray  bird  who 
had  blown  in  by  chance,  probably  picked  up  by  Arnold 
because  of  a  marriage  relationship.  It  seemed  that  they 
had  told  a  straight  enough  story.  It  was  impossible  to 
tangle  them  in  any  detail.  Still  I  had  a  general,  inde- 
finable doubt,  which  I  expressed  in  plain  words  to 
Ralston. 

Before  I  arrived  the  men  made  a  proposition  that 
seemed  eminently  fair.  This  was  an  offer  to  go  to  the 
diamond  fields  and  bring  to  San  Francisco  a  couple  of 
million  dollars'  worth  of  stones  and  place  them  in  our 
possession  as  a  guaranty  of  good  faith.  Such  a  tender 
was,  of  course,  accepted.  Slack  and  Arnold  left  San 
Francisco,  promising  to  be  back  in  record-breaking  time. 

Shortly  after  I  arrived  Ralston  received  a  telegram 
from  Arnold  dated  at  Reno,  stating  that  he  and  Slack 
were  on  the  way  and  urging  that  somebody  meet  them 
at  Lathrop,  presumably  to  share  in  the  heavy  burden 
of  responsibility.  After  a  hurried  conference  I  was 
asked  to  meet  our  emissaries  as  per  request,  and  they 
were  so  advised  by  wire.  At  the  same  time  a  later  con- 
ference was  arranged  at  my  residence.  After  my  mar- 
riage in  1866  I  had  bought  the  fine  family  home  of 
Mr.  Ralston  on  Rincon  Hill.  There  my  friends  were 
to  await  my  coming  till  the  overland  train  arrived. 

I  had  a  long  wait  at  Lathrop,  but  at  last  the  ex- 
pected overland  pulled  in.  I  located  the  men  without 
difficulty.  Both  were  travel-stained  and  weather-beaten 
and  had  the  general  appearance  of  having  gone  through 

204 


Decline   to   Reveal   Diamond   Field 

much  hardship  and  privation.  Slack  was  sound  asleep 
hke  a  tired-out  man.  Arnold  sat  grimly  erect  like  a 
vigilant  old  soldier  with  a  rifle  by  his  side,  also  a  bulky- 
looking  buckskin  package. 

Slack  soon  awoke  and  we  discussed  the  business  in 
hand  in  low  tones.  The  men  told  a  rather  lurid  story, 
but  yet  not  improbable  in  its  way.  They  said  they  had 
luckily  struck  a  spot  which  was  enormously  rich  in  stones, 
which  they  estimated  to  be  worth  two  million  dollars, 
that  these  had  been  done  up  for  convenience  in  two 
packages,  one  for  each;  that  on  their  way  home  they 
found  the  water  in  a  river  they  had  to  cross  extremely 
high,  and  for  purposes  of  safety  had  constructed  a  raft, 
had  nearly  been  upset,  had  lost  one  of  the  bags  of  dia- 
monds, but  as  the  other  contained  at  least  a  million 
dollars'  worth  of  stones,  it  ought  to  be  fairly  satisfactory. 

Slack  and  Arnold  left  the  train  at  Oakland,  turning 
over  the  sack  of  diamonds  on  my  bare  receipt.  It  was 
an  awkward,  burdensome  bundle  to  handle  on  the  ferry- 
boat. Arrived  at  San  Francisco,  my  carriage  was  wait- 
ing and  drove  me  swiftly  to  my  home.  An  eager  group 
was  assembled.  We  did  not  waste  time  on  ceremonies. 
A  sheet  was  spread  on  my  billiard  table,  I  cut  the  elab- 
orate fastenings  of  the  sack  and,  taking  hold  of  the 
lower  corners,  dumped  the  contents. 

It  seemed  like  a  dazzling,  many-colored  cataract  of 
liefht. 


205 


CHAPTER  XXVII. 

Promoters  Decide  to  Submit  Samples  of  Their 
Collection  of  Diamonds  to  Great  Authority  on 
Gems. 

Tiffany  Consults  His  Lapidary  and  Soon  Makes  Report 
That   Creates  Big  Stir  in   Speculative   Circles. 

I  think  it  was  the  next  day  or  the  day  following  that 
a  display  of  diamonds  was  made  in  the  ofifice  of  Wil- 
liam Willis  that  filled  San  Francisco  with  astonishment. 
The  precious  stones  were  actually  dislayed  in  open  trays 
to  a  multitude  of  sightseers,  until  I  bought  a  show-case 
and  gave  them  some  kind  of  protection.  General  Dodge, 
a  partner  of  Lent  in  mining,  bought  an  interest  from 
the  prospectors  at  once,  and  Maurice  Dore  also  acquired 
a  small  holding,  although  I  do  not  remember  exactly 
what. 

Hitherto  there  had  been  no  attempt  made  at  organiza- 
tion. It  was  generally  understood  that  Ralston,  Lent, 
Roberts  and  myself  owned  three-quarters  of  the  prop- 
erties by  virtue  of  money  already  advanced  and  to  be 
advanced.  For  that  there  seemed  to  be  ample  security 
in  the  gems  we  held.  The  last  invoice  alone  appeared 
to  be  security  many  times  over  for  our  cash  outlays, 
to  say  nothing  of  the  probable  value  of  the  diamond 
fields.  So  we  prepared  to  get  our  affairs  into  business 
shape,  without  further  delay,  and  for  that  ]:)ur])ose  held 

206 


Promoters  Decide  to  Submit  Samples 

a  meeting  at  which  all  concerned  were  present.  The 
plan  of  action  was  to  follow  these  lines :  First  we  were 
to  send  a  large  sample  of  the  diamonds  to  Tiffany,  of 
New  York,  then,  as  now,  the  greatest  American  au- 
thority on  precious  stones,  and  have  them  thoroughly 
examined  and  appraised.  If  their  value  were  proved  be- 
yond peradventure,  then  Messrs.  Ralston,  Lent,  Roberts, 
Dodge  and  myself  were  to  choose  a  mining  expert  to 
whom  Arnold  and  Slack  agreed  to  exhiljit  the  diamond 
fields  and  permit  a  full  examination  of  the  same. 

Nothing  could  possibly  be  fairer  to  all,  and  Arnold 
and  Slack  easily  consented  to  these  conditions,  without 
a  monment's  hesitation.  On  the  favorable  outcome  of 
the  valuation  and  the  engineer's  report  concerning  the 
diamond  deposits,  we  agreed  to  take  care  of  the  financial 
end.  Not  connected  with  any  agreement  with  Arnold 
or  Slack,  was  a  plan  to  facilitate  the  passage  of  a  law 
whereby  a  great  territory  of  mining  land  could  be  taken 
up  so  as  to  insure  to  ourselves  the  entire  field,  no  matter 
what  the  extent.  The  outline  of  a  corporation  was 
sketched,  with  a  capital  stock  of  $10,000,000  and  the 
allotment  of  shares  to  each   arranged  and   defined. 

These  preliminaries  being  settled,  we  set  out  for 
New  York  without  delay.  In  the  party  were  William 
Lent,  General  Dodge,  Rubery,  Arnold,  Slack  and  myself. 
It  had  been  arranged  beforehand  in  a  general  way  that 
Mr.  Lent  should  be  president  and  myself  general  man- 
ager. 

We  first  retained  Samuel  Barlow,  a  leader  of  the 
New  York  bar,  as  general  counsel.  Mr.  Barlow's  repu- 
tation as  a  sound  business  adviser  was  no  less  assured 

207 


The  Great  Diamond  Hoax 

than  his  standing  as  a  great  trial  lawyer.  On  his  advice 
we  added  General  B.  F.  Butler  to  our  legal  staff.  I 
had  some  southern  prejudice  against  Butler  on  account 
of  the  spoon  story  in  New  Orleans,  but  when  I  came 
to  know  the  gentleman  I  found  him  to  be  very  com- 
panionable and  quite  a  social  genius  in  his  way.  A 
side  reason  for  employing  General  Butler  was  because 
he  was  a  member  of  Congress  and  perhaps  able  to  aid 
us  materially  in  legislation  needed  to  acquire  the  dia- 
mond fields,  as  later  proved  to  be  the  case. 

Through  Mr.  Butler,  an  arrangement  was  made  to 
meet  Mr.  Tiffany  at  the  lawyer's  house.  My  counsel 
had  some  eye  to  stage  effects.  A  number  of  distin- 
guished men  were  present  to  see  the  gems  displayed. 
Among  them  I  remember  General  George  B.  McClellan, 
Horace  Greeley,  Mr.  Duncan,  of  the  banking  house  of 
Duncan,  Sherman  &  Co.,  Mr.  Tiffany,  General  B.  F. 
Butler,  and  the  host.  I  opened  the  bag  of  diamonds  I 
had  brought  from  California;  also  there  were  mixed  in 
a  few  rubies,  emeralds  and  sapphires.  Mr.  Tiffany 
viewed  them  gravely,  sorted  them  into  little  heaps,  held 
them  up  to  the  light,  looking  every  whit  the  part  of  a 
great  connoisseur.  "Gentlemen,"  he  said,  "these  are 
beyond  question  precious  stones  of  enormous  value. 
But  before  I  give  you  the  exact  appraisement,  I  must 
submit  them  to  my  lapidary,  and  will  report  to  you 
further  in  two  days." 

Within  two  days  Mr.  Tiffany  presented  his  report. 
In  an  official  statement,  still  available,  his  valuation  on 
the  lot  was  $150,000.  My  own  recollection  is  that  he 
named  a  much  higher  sum.     However,  let  it  go  at  that. 

208 


Promoters  Decide  to  Submit  Samples 

At  that  figure,  we  had  diamonds  enough  already  in  stock 
to  make  up  a  total  of  $1,500,000  in  hard  cash,  whenever 
we  wanted  to  turn  them  into  money.  That  certainly 
seemed  a  very  satisfactory  financial  basis — regular  velvet 
to  begin  with.  The  news  of  the  Tififany  appraisement, 
though  not  intended  for  public  consumption,  soon  be- 
came common  property  in  New  York  and  made  a  big 
stir  in  speculative  circles.  The  hardier  class  of  plungers 
were  only  too  eager  to  get  aboard  even  at  this  early 
stage  of  the  game. 

All  that  remained  now  was  the  choice  of  a  mining  ex- 
pert. One  name  naturally  suggested  itself — Henry 
Janin. 

Henry  Janin  bore  at  that  time  in  the  financial  world 
about  the  same  reputation  that  John  Hays  Hammond 
enjoys  to-day.  As  a  great  mine  expert  and  consulting 
engineer,  he  was  without  a  peer  in  the  United  States, 
perhaps  in  the  world.  Nearly  all  the  big  operators  like 
Haggin,  Hayward  and  their  class  were  willing  to  stake 
their  fortunes  on  his  judgment.  It  was  said  of  Janin 
that  he  had  the  record  of  having  examined  something 
over  six  hundred  mines,  without  once  making  a  mistake, 
certainly  without  ever  having  caused  his  clients  to  lose  a 
dollar  by  his  bad  judgment.  If  he  had  any  failing  at  all, 
it  was  on  the  side  of  ultra-conservatism.  Some  com- 
plained that  he  never  took  a  chance — that  he  even  turned 
down  good  mines,  to  strengthen  the  confidence  of  the 
greatest  investing  classes,  both  in  the  old  world  and 
the  new.  The  O.  K.  of  Henry  Janin  fixed  the  reputa- 
tion of  a  mining  property  in  every  market. 

Therefore  there  could  not  have  been  selected  a  better 

209 


The  Great  Diamond  Hoax 

equipped  expert,  so  far  as  the  financial  world  knew,  to 
settle  finally  the  existence  of  the  diamond  fields.  Mr. 
Janin  was  interviewed.  He  was  a  man  of  big  affairs, 
whose  time  was  well  occupied.  But  he  agreed  to  make 
the  examination  provided  the  time  to  be  consumed  did 
not  exceed  a  month.  He  was  also  a  very  high  priced 
professional.  His  best  terms  were  $2,500  cash,  all  ex- 
penses paid,  and  a  right  to  take  up  1,000  shares  of  the 
stock  at  a  nominal  price.  I  may  add  here  that  Mr. 
Janin  later  on  sold  his  stock,  while  the  excitement  was  in 
full  bloom,  for  $40,000.  Mr.  Lent  rebelled  and  protested 
against  this  arrangement  as  excessive,  but  was  overruled. 
He  and  I  afterwards  purchased  Mr.  Janin's  stock. 

At  this  stage  of  the  proceedings  Arnold  became 
restive.  He  said  he  was  placing  his  property  at  the 
mercy  of  others  without  proper  security,  that  what  he 
had  received  was  a  trifle  compared  to  the  value  he  was 
about  to  disclose  and  that  he  must  have  a  further  guar- 
antee in  cold  cash.  He  named  a  hundred  thousand  dol- 
lars as  the  amount  that  must  be  paid  down,  l)ut  agreed 
to  let  it  remain  in  escrow,  pending  Mr.  Janin's  report. 
Some  quick  writing  went  on  between  Mr.  Lent  and  Mr. 
Ralston,  as  the  result  of  which  the  latter  transmitted 
the  amount  by  telegraphic  order;  Mr.  Lent  holding  the 
diamonds  appraised  by  Tiffany  at  $150,000  as  a  further 
and  final  security.  This  was  not  exactly  according  to 
program,  but  the  transaction  was  fairly  Inisiness-like  and 
did  not  present   itself  as  a   hold-up. 

All  our  arrangements  and  differences  in  New  York 
were  settled  in  a  very  brief  space  of  time  and  we  set  out 

210 


Promoters  Decide  to  Submit  Samples 

in  high  spirits  on  the  way  to  the  mysterious  diamond 
land.  The  party  consisted  of  Henry  Janin,  General 
George  S.  Dodge,  Alfred  Rubery.  myself  and  Arnold 
and  Slack. 


211 


CHAi''i  i-:u  \\\  IIJ. 

Discoverers  of  Field  of  Diamonds  Finally  Lead  the 
Party  of  Investors  to  the  Scene  of  Wonderful 
Find. 

Pick    Turns   Up   Many  Fine   Gems,  and  Expert   Groivs 
Enthusiastic  as  He  Figures  Out  the  Profits. 

Our  friends  in  San  Francisco  had,  of  course,  been 
advised  by  wire  of  our  transactions  and  movements,  in- 
cluding the  date  of  our  departure.  We  had  not  jour- 
neyed far  before  we  received  on  the  train  a  telegram 
that  George  D.  Roberts  and  a  considerable  party  were 
on  the  way  to  join  us  to  visit  the  diamond  fields  and 
would  meet  us,  if  I  recollect  aright,  at  Omaha.  Here 
again,  Arnold  absolutely  rebelled.  He  had  kept  all  his 
engagements,  he  said.  The  diamonds  had  been  ap- 
praised by  an  expert  of  our  own  selection.  He  was 
now  on  his  way  with  the  mining  engineer  chosen  by  us 
and  with  the  appointed  representatives  of  the  San  Fran- 
cisco interests  to  exhibit  the  diamond  fields  and  permit 
any  kind  of  examination  we  wished  to  make ;  but  he  was 
not  willing  to  expose  his  hand  to  the  whole  world  until 
other  business  arrangements   were  complete. 

It  seemed  to  me  that  Arnold's  argument  was  unan- 
swerable. Before  we  left  San  Francisco,  every  detail 
had  been  arranged.  This  was  a  plain  departure  from 
the  plan.     I  took  sides  with  Arnold.     In  fact,  there  was 

212 


Scene  of  Wonderful  Find 

nothing  else  to  do,  for  he  insisted  that  everything-  was 
off  unless  we  conceded  to  his  wishes.  Besides,  I  had 
every  faith  in  Janin's  ability  to  pass  on  the  genuineness 
of  the  diamond  fields.  Accordingly  a  telegram  was  sent 
that  turned  Roberts  and  his  party  back. 

We  left  the  Union  Pacific  Railroad  at  a  small  station 
near  Rawlings  Springs.  Here  we  hired  the  necessary 
outfit  and  struck  out  in  the  wilderness,  Arnold  and  Slack 
leading  the  way.  Our  course  was  erratic.  At  times  our 
leaders  seemed  to  be  perplexed,  to  have  lost  their  way. 
At  times  they  climbed  high  peaks,  apparently  in  search 
of  landmarks.  The  country  was  wild  and  inhospitable. 
We  suffered  during  four  days'  travel  many  inconve- 
niences. The  party  became  cross  and  quarrelsome.  At 
last,  on  the  fourth  day,  early  in  the  morning,  Arnold 
set  out  alone,  to  get  his  bearings,  as  he  said.  He  re- 
turned about  noon,  said  everything  was  all  right,  and 
we  set  out  again  with  high  hopes.  By  four  o'clock  we 
pitched  camp  on  the  famous  diamond  fields. 

The  spot  was  at  a  high  elevation,  about  7,000  feet 
above  sea  level,  I  think.  Physically,  it  embraced  a 
small  mesa  or  rather  gently  sloping  basin,  littered  here 
and  there  with  rocks  comprising  about  thirty  or  forty 
acres,  through  which  a  small  stream  of  water  ran.  It 
was  located  in  one  of  the  most  unfrequented  parts  of 
the  United  States,  although,  as  it  afterwards  proved, 
Arnold  and  Slack  in  their  zig-zag  course,  had  actually 
brought  us  nearly  parallel  with  the  railroad  and  not 
more  than  twenty  or  twenty-five  miles  from  it.  In  fact, 
once,  while  we  were  at  the  mines,  on  a  very  still  day,  I 
thought    I    heard    something    in    the    far    distance    that 

213 


The  Great  Diamond  Hoax 

•>oundcd  like  the  ghost  of  a  whistle.  When  I  mentioned 
this  to  Arnold,  he  merely  smiled.  The  railroad  was  at 
least  a  hundred  miles  away,  he  said. 

Rut  at  all  events  we  were  mighty  glad  to  reach  our 
destination  and  now  everything  was  sidetracked  to  be- 
gin the  diamond  hunt.  We  barely  unsaddled  our  animals 
and  secured  them  ;  then  commenced  to  hunt  diamonds. 
Arnold  and  Slack  were  serene  and  confident.  They 
pointed  out  several  spots  where  they  had  previously 
dug  and  found  the  precious  stones,  already  mined 
and  delivered  in  San  Francisco.  We  all  went  to  work 
witli  our  primitive  mining  implements — picks,  shovels 
and  pans.  Everyone  wanted  to  find  the  first  diamond. 
After  a  few  minutes  Rubery  gave  a  yell.  He  held  ud 
something  glittering  in  his  hand.  It  was  a  diamond,  fast 
enough.  Any  fool  could  see  that  much.  Then  we  began 
to  have  all  kinds  of  luck.  For  more  than  an  hour,  dia- 
monds were  being  found  in  profusion,  together  with 
occasional  rubies,  emeralds  and  sapphires.  Why  a  few 
pearls  weren't  thrown  in  for  good  luck  I  have  never 
yet  been  able  to  tell.     Probably  it  was  an  oversight. 

You  may  depend  upon  it  that  we  were  in  a  happy 
mood  that  night.  There  wasn't  the  usual  row  over  who 
should  cook  supper,  who  should  wash  the  dishes,  who 
should  care  for  the  stock,  which  little  incidents  of 
camp  life  had  brought  us  to  the  verge  of  bloodshed 
during  the  three  previous  days.  On  the  contrary,  good 
will  and  benevolence  were  slopping  over.  Arnold  and 
Slack  had  excellent  reason  to  be  satisfied.  Mr.  Janin 
was  exultant  that  his  name  should  be  associated  with 
tlie  most  momentous  discovery  of  the  age,  to  say  noth- 

214 


Scene  of  Wonderful   Find 

\ng  of  the  increased  value  of  his  1,000  shares;  while 
General  Dodge,  Rubery  and  myself  experienced  the  in- 
toxication that  comes  with  sudden  accession  of  bound- 
less wealth. 

The  next  day  prospecting  was  resumed  and  covered 
a  wide  range.  Everywhere  we  found  precious  stones — 
principally  diamonds — although  a  few  sparklers  of  other 
kinds  were  interspersed.  It  was  quite  wonderful  how 
generally  the  gems  were  scattered  over  a  territory  about 
a  quarter  of  a  mile  square  and  of  course  we  were  only 
doing  surface  examination.  No  one  could  tell  what  depth 
might  produce. 

Accounts  have  been  published  to  the  effect  that  when 
we  arrived  at  the  diamond  fields  there  were  visible  evi- 
dences of  the  ground  having  been  tampered  with  and 
disturbed.  This  is  absolutely  absurd  on  its  face.  In  the 
first  place  any  such  evidence  would  have  excited  the  sus- 
picion of  the  keen-eyed  Janin  in  a  moment.  Secondly, 
such  a  clumsy  method  of  "salting"  was  unthinkable. 
Undoubtedly  holes  were  made  in  the  soil  with  sharp 
iron  rods,  gems  were  dropped  in  the  holes,  which  were 
closed  by  a  hard  stamp  of  the  foot  and  the  first  winter's 
rain  obliterated  every  trace  that  remained  of  human 
agency.  Wherever  we  worked,  the  ground  was  "in 
place." 

Two  days'  work  satisfied  Janin  of  the  absolute  gen- 
uineness of  the  diamond  fields.  He  was  wildly  enthusias- 
tic. It  was  useless,  he  said,  to  spend  more  time  on  that 
particular  piece  of  property — that  was  proved.  The  im- 
portant thing  was  to  determine  how  much  similar  land 
was  in  the  neighborhood,  and  be  able  to  seize  on  every- 

215 


The  Great  Diamond  Hoax 

thing  in  sight,  for  Mr.  Janin  pointed  out  that  this  new 
field  would  certainly  control  the  gem  market  of  the 
world  and  that  the  all-essential  part  of  the  program 
was  for  one  great  corporation  to  have  absolute  control. 

So  we  started  on  a  widely  extended  prospecting  trip. 
Arnold  and  Slack  did  not  care  to  go  along,  and,  to  tell 
the  truth,  we  weren't  very  anxious  for  their  company. 
We  saw  much  landscape,  also  much  land  that  exactly 
resembled  the  formation  at  the  diamond  mine.  We 
staked  off  in  a  rough  way  an  enormous  stretch  of  the 
country,  set  up  notices  of  claims  that  we  hoped  would 
hold  things  down  and  covered  what  we  believed  to  be 
the  entire  diamondiferous  area. 

We  returned  to  the  original  treasure  fields  and  found 
Arnold  and  Slack  patiently  waiting.  Some  discussion 
arose  over  the  vast  values  we  were  leaving  behind  us 
unguarded  and  the  urgent  necessity  to  place  some  one  in 
charge.  Slack  was  willing  enough  to  stay,  and  Dodge 
and  Janin  begged  me  to  induce  Rubery  to  remain  with 
him.  This  Rubery  rebelled  against  lustily.  He  had 
come  on  a  pleasure  trip — nothing  more.  But  he  was  a 
most  accommodating  man  at  heart,  and  finally  gave  in. 
So  we  rode  away  from  the  diamond  fields,  leaving 
Rubery  and  Slack  on  guard.  I  never  saw  Slack  after- 
wards— what  became  of  him  is  a  dark  mystery  that  I  will 
take  up  later  on. 


216 


CHAPTER  XXIX. 

Public  Soon  Hears  of  Wonderful  Find  and  Gos- 
sips Carry  News  Until  Whole  World  Is  Keenly 
Interested. 

Company   to   Develop   Diamond   Fields  Includes   Great 
Lords  of  Finance  and  One  Noted  Union  General. 

We  returned  direct  to  New  York ;  that  is  to  say,  all 
of  the  original  party  except  Riibery  and  Slack.  Of 
course,  Mr.  Ralston  was  advised  by  wire  of  the  sub- 
stantial results  of  our  examination.  Likewise,  of  course, 
we  advised  our  New  York  friends  who  had  been  pre- 
viously in  our  confidence,  that  our  best  expectations  were 
exceeded.  Where  so  many  are  cognizant  of  a  secret, 
it  very  soon  becomes  public  property,  and  in  a  brief 
space  of  time  all  New  York  and,  for  the  matter  of  that, 
all  the  civilized  world,  knew  that  vast  diamond  fields 
had  been  discovered  on  the  North  American  continent, 
had  been  inspected  by  a  mining  engineer  of  great  repu- 
tation and  pronounced  genuine.  Something  like  the  pro- 
found excitement  that  stirred  the  mighty  Argonaut 
movement  began  to  take  form  everywhere. 

As  an  evidence  of  this  fact,  almost  immediately  after 
I  had  reached  New  York,  Baron  Rothschild  of  London, 
who  had  previously  made  inquiries  of  us,  arranged  for 
what  amounted  to  a  cable  interview.  He  informed  me 
that   he   had   just   received   a   cable   from   Mr.    Ralston. 

217 


The  Great  Diamond  Hoax 

(This,  I  presume,  related  to  the  agency  he  accepted  at  a 
later  date.)  He  stated  further  that  he  had  heard  of  the 
Tiffany  appraisement,  also  that  I  had  personally  made  a 
visit  to  the  mines  with  a  leading  expert.  He  wished  me 
to  confirm  the  result  of  our  observations.  I  answered 
Baron  Rothschild  that  half  the  truth  had  not  been  told ; 
that  the  diamond  fields  were  rich  l)e\ond  calculation ; 
that  every  doubt  and  shadow  of  a  doubt  had  been  abso- 
lutely removed,  so  far  as  I  was  concerned.  The  Baron 
thanked  me,  saying  he  was  pleased  to  hear  the  good 
news. 

In  fact,  after  the  Tift'any  valuation,  the  personal  exami- 
nation of  the  mines  and  the  statements  of  Mr.  Janin 
before  he  promulgated  his  famous  report,  every  suspi- 
cion gave  way  to  an  unbounded  enthusiasm.  Mr.  Lent 
afterward  made  a  written  statement,  still  in  existence, 
that  Mr.  Janin  assured  him  he  could  wash  out  a  million 
dollars'  worth  of  diamonds  a  month  with  the  assistance 
of  twenty  rough  laborers.  Mr.  Janin  never  went  that 
far  with  me  ;  in  fact,  he  afterward  questioned  the  entire 
accuracy  of  j\Ir.  Lent's  figures,  and  Mr.  Lent  himself  ad- 
mitted that  he  might  have  made  an  error.  But  before 
leaving  the  diamond  fields  Mr.  Janin  assured  me  that  the 
discovery  location  alone,  which  we  had  partially  exam- 
ined, was  certainly  worth  many  million  dollars,  with 
countless  possibilities  besides. 

Who  wouldn't  become  enthusiastic  with  such  a  show- 
ing? It  fired  the  imagination  of  all  financialdom.  It 
upset  the  caution  of  the  wisest  heads  in  the  old  world,  as 
well  as  in  the  new.  There  was  a  wild  scramble  to  get  on 
board,  almost  at  any  price. 

218 


Public  Soon  Hears  of  Wonderful  Find 

Some  statements  have  been  made  to  tlie  effect  that  J 
used  my  influence  to  liave  the  headquarters  of  the  com- 
pany at  New  York  instead  of  San  Francisco.  There  is 
this  much  truth  to  the  statement,  that  it  was  debated 
very  seriously.  This  was  a  plain  matter  of  business,  a 
question  of  dollars  and  cents — not  patriotism.  In  launch- 
ing a  concern  of  such  tremendous  importance,  probably 
destined  to  affect  profoundly  a  vast  industry,  it  is  al- 
ways deemed  vital  to  have  the  support  of  the  largest 
financial  center  possible.  New  York  was  then,  as  now, 
the  great  haunt  of  capital  in  the  United  States.  Many 
of  its  leading  men  were  only  too  anxious  to  identify 
themselves  with  the  new  exploitation.  I  did  not  think 
that  the  question  of  headquarters  was  one  deserving 
mature  consideration,  especially  inasmuch  as  San  Fran- 
cisco, controlling  the  stock  issues,  would  necessarily  be 
the  great  beneficiary  in  the  long  run. 

But  this  point  was  easily  settled.  Mr.  Ralston  and 
myself  owned  a  majority  of  the  property.  This  we 
had  held  from  the  outset.  I  simply  telegraphed  to  Mr. 
Ralston,  laying  the  matter  before  him,  without  prejudice. 
Mr.  Ralston's  answer  was  decisive.  He  said  that  San 
Francisco  stood  ready  to  furnish  any  amount  of  capital 
required.  There  was  no  further  argument  on  that  head. 
To  San  Francisco  the  headquarters  went,  but  this  much 
was  conceded  to  New  York — that  branch  offices  were 
to  be  maintained  in  that  city,  and  that  Samuel  P.  Bar- 
low and  General  George  B.  McClellan  were  to  be  resi- 
dent directors ;  which  arrangement  was  later  carried  out. 
The  New  York  connection  was  clearly  indicated  by  the 
company's  name. 

219 


The  Great  Diamond  Hoax 

The  scene  now  shifted  to  San  Francisco,  where  Mr. 
Ralston  had  the  situation  well  in  hand.  A  company  was 
regularly  organized  under  the  laws  of  California,  entitled 
the  San  Francisco  and  New  York  Mining  and  Com- 
mercial Company,  with  a  capital  stock  of  $10,000,000, 
divided  into  100.000  shares.  Its  powers  were  of  the 
largest  possible  description ;  not  alone  to  engage  in  the 
business  of  mining  and  owning  mines  and  their  acces- 
sories, but  also  to  engage  in  every  class  of  commercial 
business,  including  the  preparation  of  precious  stones  for 
the  general  market.  The  apparent  intention  of  the 
organizers  was  to  move  the  great  lapidary  establishments 
of  Amsterdam  to  the  Pacific  Coast,  and  the  truth  is 
that  this  design  caused  no  small  concern  in  the  Low 
Countries,  wdiere  the  cutting  of  gems  is  an  industry 
hundreds    of   years    old. 

San  Francisco  was  certainly  ripe  for  the  new  com- 
pany. Hardly  a  business  man  of  any  considerable  wealth 
would  not  have  considered  it  a  rare  privilege  to  be 
admitted  to  participation  in  the  enterprise  on  the 
ground  floor.  It  was  only  a  case  of  choosing  the  highest 
class  of  names  in  the  community,  to  launch  the  great 
undertaking  under  the  most  brilliant  auspices.  Twenty- 
five  gentlemen,  representing  the  cream  of  the  financial 
interests  of  the  city  of  San  Francisco,  men  of  national 
reputation  for  high-class  business  standing  and  personal 
integrity,  were  permitted  to  subscribe  for  stock  to  the 
amount  of  $80,000  each,  and  this  initial  capital  of  $2,- 
000.000  was  immediately  paid  to  the  Bank  of  California. 

At  a  stockholders'  meeting  the  following  board  of 
directors  were  elected  to  manage  the  afifairs  of  the  cor- 

220 


THOS.     S.    SELBY 

Founder   of    Selby    Smelting    Works, 

director  Diamond   Co. 


Public  Soon  Hears  of  Wonderful  Find 

poration:  Wm.  M.  Lent,  A.  Gansl,  Thomas  Selby,  Mil- 
ton S.  Latham,  Louis  Sloss,  Maurice  Dore,  W.  F.  Bab- 
cock,  William  C.  Ralston,  William  Willis.  George  B. 
]\IcClellan  and  Samuel  P.  Barlow  were  at  the  same  time 
elected  directors,  with  headquarters  at  the  City  of  New 
York.  Mr.  Lent  was  then  chosen  president,  W.  C.  Ral- 
ston, treasurer,  and  William  Willis,  secretary.  David 
D.  Colton  resigned  from  his  position  with  the  railroad 
to  become  general  manager. 

Only  old  timers  can  recognize  what  these  names 
meant.  All  the  owners  of  them  are  long  since  dead. 
Some  of  them  went  into  a  financial  eclipse  before  they 
died.  But  in  1872  they  stood  as  the  last  word  in  the 
financial  and  commercial  world  of  the  Pacific  Coast. 
I  might  mention  here  for  the  benefit  of  the  later  genera- 
tion that  A.  Gansl  was  the  representative  of  the  House 
of  Rothschild  on  the  Pacific  Coast. 

Such  was  the  lineup.  The  biggest  men  of  San  Fran- 
cisco were  solidly  behind  the  enterprise.  Two  distin- 
guished citizens  of  New  York  represented  the  company 
as  resident  directors  there,  and  in  the  Old  World  the 
famous  house  of  Rothschild  became  the  company's  agents. 
The  interest  of  Slack  and  Arnold  was  wiped  out  finally 
by  a  cash  payment  of  $300,000,  which  was  turned  over 
to  Arnold  personally,  he  having  a  properly  executed 
power  of  attorney  to  act  for  Slack.  Thus,  the  decks 
were  cleared. 


223 


CHAPTER  XXX. 

"Old  Mixer"  Draws  ox  His  I.magixatiox  and  Tells 
Wild  Tale  of  Sixgle  Gem  as  Big  as  a  Pigeon's 
Egg. 

Winter  Causes  Lull,  But  Cold  Fails  to  Chill  the  Ardor 
of  Men   Counting  on   Millions   in   Spring. 

On  Jiilv  30.  1872,  the  articles  of  incorporation  of  the 
San  Francisco  and  New  York  Mining  and  Commercial 
Company  were  formally  filed  and  the  report  of  Expert 
Janin  was  made  public.  As  yet,  however,  the  exact 
location  of  the  diamond  fields  was  undisclosed,  because 
the  company's  rights  to  the  great  territories  claimed  were 
not  completed,  although  a  recent  act  of  Congress  chang- 
ing the  mining  laws  gave  ample  opportunity.  The  wild- 
est tales  concerning  the  new  discoveries  were  at  once 
turned  loose.  An  article  in  the  N^ew  York  Sun.  signed 
"Old  !Miner,"  located  the  exact  position  of  the  fields 
somewhere  in  Southeastern  Arizona,  a  guess  that  hap- 
pened to  be  out  of  the  way  by  some  seven  or  eight  hun- 
dred miles.  The  "Old  !Miner"  further  stated  that  the 
company  had  in  its  possession  a  single  gem  larger  than 
a  pigeon's  egg,  of  matchless  purity  of  color,  worth  at  a 
low  estimate  $500,000.  You  may  be  sure  that  this 
started  a  good-sized  stampede  for  Arizona. 

The  directors  had  several  meetings  and  decided  to 
proceed  with  extreme  circumspection.     For  one  thing, 

224 


''Old   Miner"   Draws  on   His   Imagination 

they  sent  a  large  consignment  of  flianionds  to  the  House 
of  Rothscliild  in  London  for  examination  and  sale.  At 
the  same  time  a  party  of  fifteen,  including'  miners,  sur- 
veyors and  others  interested,  were  dispatched  to  the  dia- 
mond fields  for  the  purpose  of  exploring,  surve\ing' 
and  securing  our  rights.  In  the  meantime  not  a  share 
of  stock  was  placed  on  the  market,  although  the  ex- 
citement was  intense. 

I  append  an  extract  from  a  morning  paper  of  the  day 
following  the  incor])oration  and  making  [juhlic  Tanin's 
radiant  report : 

(Alta,  Aug.  1,  1872.) — "American  Diamond  h'ields. 
One  Thousand  Diamonrls  Xow  in  This  City.  Also  Four 
Pounds  of  Rubies  and   Large   Sapphires. 

"We  have  a  wonderful  story  to  tell.  We  listened  to  it 
at  first  with  incredulit)',  but  after  hearing  all  our  in- 
fomant  had  to  say  we  found  reasons  for  believing  it. 
We  have  seen  a  report  written  by  Henry  Janin,  a  mining 
engineer  of  an  established  reputation  who  had  visited  the 
mines,  examined  them  and  reported  favorably  on  them. 
He  has  accepted  the  position  of  superintendent  and  has 
expressed  the  opinion  that  with  twenty-five  men  he  will 
take  out  gems  worth  at  least  $L000,000  a  month.  In 
this  paper  he  attached  so  much  importance  to  the  dis- 
covery that  he  discusses  the  question  whether  the  price 
of  rubies  and  diamonds  is  likely  to  depreciate  in  conse- 
quence of  increased  production  and  answers  the  ques- 
tion in  the  negative.  We  have  thus  commenced  with  Mr. 
Janin  because  he  is  well  known  here  and  it  is  mainly 
on  his  statements  that  confidence  rests.      His  statements 

225 


The  Great  Diamond  Hoax 

evidcnth'  command  contidence,  for  some  of  the  leadiiii;' 
capitalists  of  the  State  have  purchased  stock. 

"The  place  of  the  new  mines  has  not  l^een  communi- 
cated to  us  l)y  any  of  the  interested  parties,  but  street 
rumor  sa}s  it  is  New  ^Mexico.  About  three  years  ago. 
they  say.  an  Indian  near  the  diamond  deposits  gave 
several  diamonds  and  rubies  to  a  white  man  who 
brought  them  to  ^Messrs.  Roberts  and  Harpending  in  San 
Francisco.  These  gentlemen  satisfied  themselves  of  the 
value  of  the  gems  and  sent  men  to  hunt  for  more.  They 
met  the  Indian  after  a  long  search,  he  took  them  to  the 
place  and  was  subsequent!}-  drowned.  We  tell  the  story 
as  it  was  told  to  us. 

"Then  Air.  Janin  went  to  the  s])ot.  washed  a  ton  and 
a  half  of  gravel,  took  out  1000  diamonds,  four  pounds 
of  rubies  and  a  dozen  sapphires,  and  selected  the  best 
ground  for  mining.  Three  thousand  acres  were  claimed 
under  the  mining  law  passed  last  session.  The  country 
for  a  considerable  distance  around  was  exaiuined.  Init 
no  equally  promising  deposit  was  found. 

"Most  of  the  diamonds  found  l)v  Mr.  Janin  are  small, 
weighing  a  karat.  One  obtained  ])reviously  weighed 
over  100  karats,  but  was  dark  and  of  little  value  rela- 
tivel}-.  There  are  109  karats  in  an  avoirdupois  ounce, 
so  that  a  diamond  weighing  a  karat  is  a  small  affair, 
yet  if  clear  and  well  s]ia];ed  may  be  worth  from  $25  to 
$50.  .  .  .  Some  of  the  sappliires  are  as  large  as 
pigeon  eggs. 

"Tlie  diamond  mines  are  tlic  iiro])erty  of  the  San 
iM'ancisco  and  \ew  NOrk  Alining  and  Commercial 
Companx-.    wliicli    lia^   l)cen    incorporated,   and    the   direc- 

226 


'^Old   Miner''   Draws  on   His   Imagination 

tors  are  AI.  S.  Latham,  A.  Gansl.  W.  F.  Rabcock,  Louis 
Sloss,  William  AT.  Lent,  T.  H.  Selby,  Maurice  Dore, 
General  George  B.  AlcClellan  and  Samuel  L.  Barlow,  the 
last  two  of  Xew  York.  The  company  is  incorporated 
in  this  cit}'.  It  has  100.000  shares  of  stock  and  they 
have  been  selling  at  $40,  making  the  present  market 
value  of  the  whole  property  $4,000,000. 

''This  price  indicates  great  expectations,  as  Air.  Gansl 
is  the  agent  of  the  Rothschilds  and  Afr.  Latham  of 
prominent  British  capitalists.  A  party  of  miners  will 
go  to  the  mines  with  tools  and  provisions  for  the  win- 
ter's work  and  the  extraction  of  gems  will  begin.  The 
stones  are  to  be  brought  to  San  Francisco  and  cut  here." 

But  that  was  nothing  compared  with  wliat  followed, 
when  the  last  part}'  returned  from  the  fields  on  (October 
6.  Previous  to  that  Deacon  Fitch  had  cautioned  the 
public  more  than  once  to  go  slow  on  the  diamond  craze. 
But  thereafter  even  he  joined  the  procession  joyously. 
Witness  this  : 

(From  the  Bulletin,  Oct.  7.  1872.) 

"The  Diamond  h^iclds — About  the  20th  of  August  a 
party  of  fifteen  men  left  this  city  to  ex])lore  the  diamond 
fields  about  which  there  has  been  such  a  furore  of  ex- 
citement. Amongst  them  were  the  following  well-known 
gentlemen :  G.  D.  Roberts,  General  John  \\'.  Bost,  j\L 
G.  King,  M.  G.  Gillette,  Alfred  Rubery,  John  F.  Boyd, 
Dr.  C.  Cleveland,  E.  \[.  Fry,  Chauncey  Fairfield  and 
Chas.  G.  Alyers. 

"The  members  of  the  exjiedition  returned  last  evening. 
They  experienced  no  trouble  with  the  Indians,  but  had 

227 


The  Great  Diamond  Hoax 

a  ver\-  tedious  march  to  the  tields  and  thence  home.  The 
heads  of  the  party  declare  that  their  explorations  more 
than  confirmed  the  orii^inal  report  of  Janin  of  the  extent 
and  richness  of  the  deposits  and  they  exhibited  speci- 
mens which  they  say  they  secured  with  their  own  exer- 
tions with  but  little  labor.  This  ])arty  went  merely  to 
explore  and  prospect  the  country  where  the  diamonds 
and  rubies  were  said  to  abound  and  not  for  the  jmrpose 
of  workini;".  They  say  that  active  operations  could  not 
be  carried  on  when  the}-  were  there,  as  the  altitude  is 
great  and  the  ground  covered  with  snow.  The  speci- 
mens the}-  jjrought  back  are  similar  to  those  previousl}- 
exhibited  in  this  cit}'  and  they  numl)er  IS^f)  diamonds  of 
various  sizes. 

"]\Ir.  Roberts  says  that  if  the)'  had  been  deceived  they 
are  the  worst  deceived  and  cheated  men  who  ever  lived. 
They  surveyed  3000  acres  of  land  and  ])ropose  to  keep 
secret  the  exact  locality  until  the  com])any  receives  a 
Government  ])atent.  The  implements  used  by  them  seem 
to  have  been  ordinary  jackknives — an  im])rovement  on 
the  boot  heels  of  the  original  locators.  If  so  nuicli 
wealth  can  be  turned  up  by  such  primitive  means,  what 
might  be  accomplished  with  shovels  and  pickaxes?  The 
report  of  the  party  renewed  the  excitement  and  little 
else  is  talked  about  on  California  street  but  diamonds 
and  rubies.  A  meeting  of  the  trustees  of  the  company 
was  called  for  2  ]>.  m.  and  further  develo])ments  will  be 
awaited  with  interest.  A  fact  that  is  so  easil\-  demon- 
strated as  the  existence  of  diamonds  in  that  country 
should  not  be  longer  one  of  doubt  and  susi)icion." 

228 


"Old   Miner"   Draws  on   His   Imagination 

Of  course,  everythin<4'  was  closed  down  for  the  winter. 
But  every  holder  of  the  company's  stock  figured  on 
being'  a  millionaire  at  least  by  the  early  s])ring".  from  the 
proceeds  of  his  diamond  field  adventures. 

I  should  have  added  that  when  we  returned  from  the 
diamond  fields  Mr.  J  an  in  took  a  ]:)ackage  of  the  gems 
we  had  found  to  Tiifany  for  valuation.  We  had  esti- 
mated them  to  be  worth  $20,000,  Init  the  jeweler  scaled 
this  down  to  $8000.  This  didn't  disturl)  Janin.  He 
considered  it  a  "bear"  movement. 


229 


CHAPTER  XXXT. 

Rri)i-:  Aw'AKEXixG  Follows  Dreams  of  Boltndless 
\\'i:.\LTii ;  Whii^e  Pro:v[oters  Wait  for  Spring 
W'dRi)  Sl'ddenly  Comes  That  Tiiev  Were  ATctims 
OF  Cle\'i-:r  Swindle. 

Diaiiioiid  .llrrady  Cut  Rri'cals  fraud:  Gems  Had  Been 
Carried  to  Seeiie  of  "Find"  and  Planted  Like  Seeds. 

ju>t  what  nii.^lu  have  lia])i)cnc(l  in  a  sin^'le  month  of 
wild  s])ccu]ation  had  the  stock  of  the  San  Francisco  and 
New  ^'o^k  Mining-  and  Commercial  Company  been 
])laced  in  an_\-  considerable  (jnantity  on  the  market,  is 
hard  to  tell,  lint  one  thini;"  is  ver}-  certain — it  wonld 
have  cansed  a  catastroj^he  almost  without  parallel  in  the 
civilized  world.  The  public  was  keyed  up  to  the  point  of 
a  speculative  craze  such  as  even  the  Comstock  never 
saw,  not  alone  in  San  I'rancisco  but  in  nearly  every 
financial  center  of  the  earth.  Alillions  u])on  millions 
would  have  been  invested.  The  shares  would  have 
soared  to  fabulous  figures.  Banks  would  have  advanced 
money  on  these  prime  securities,  as  was  the  custom  in 
those  times.  And  then  the  awful  crash  !  There  would 
have  been  more  ruins  in  financialdom  than  San  Francisco 
exhibited  after  the  fire.  Every  day  the  mails  were 
loaded  with  letters  from  eager  corres])()ndents  making- 
inquiries  for  stock.  The  best  and  unanswerable  proof 
that  everyone  connected  with  the  coiui)any  acted  in  abso- 

230 


LOUIS    SLOSS 

President   Alaska    Commercial    Co. 

director    Diamond    Co. 


Rude  Awakening  Follows   Dream 

lute  good  faith  is  to  be  found  in  the  fact  that  not  a 
share  changed  hands. 

Meanwhile,  however,  hantlsome  offices  were  engaged, 
and  David  D.  Colton  was  installed  in  all  the  dignity  of 
general  manager.  This  was  long  before  the  date  of 
typewriters,  and  it  rec|uired  several  clerks  to  answer 
letters.  A  large  map  showing  the  general  outlines  and 
physical  characteristics  of  the  3000  acres  claimed  b\'  the 
company  was  displayed  in  the  office.  It  showed  the 
relative  position  of  Discovery  Claim.  Ruby  Gulch.  Dia- 
mond Mat,  Sapphire  Mollow.  and  other  locations  with 
names  ecjually  sug'gestive  of  wealth  without  limit.  Many 
longing  eyes  were  cast  on  that  map  by  would-be  s])ecu- 
lators.  The  company  had  considered  a  plan  for  holcHng 
and  working  what  was  known  as  Discovery  Claim  on  its 
own  account,  and  granting  concessions  in  the  remaining 
territory  for  so  nmch  down  in  cash  and  a  royalty  on  the 
gems  recovered. 

Some  fifteen  or  more  bona  fide  offers  were  made  to 
purchase  a  concession  for  $200,000  cash  and  a  royalty 
to  the  parent  company  of  20  per  cent.  Not  only  that, 
but  the  purchasers  of  such  concession  would  have  been 
able  to  place  stock  on  the  market  and  sell  the  shares 
like  hot  cakes.  Quite  a  few  million  could  have  been 
gathered  in  from  that  source  alone.  Why  not?  Even 
granting  that  the  element  of  gambling  was  strong,  never- 
theless, such  a  property  had  a  far  better  backing  of 
apparent  value  than  nine-tenths  of  the  wildcat  mining 
schemes  launched  every  week  on  the  stock  exchange. 

Not  only  that.  l)ut  three  other  diamond  and  ruby 
companies    were   organized,   each    with    fairl\-    represent- 

233 


The  Great  Diamond  Hoax 

ati\c  men  lichind  them.  ( )nc  of  these  companies  exjjosed 
to  pubHc  view  a  gem  that  looked  Hke  tlie  headlight  of  a 
locomotive,  seen  through  a  fog  after  dark.  Tt  was 
kuDwn  as  the  Staunton  rnl)_\-.  and  was  general]}'  con- 
ceded by  experts  to  be  a  genuine  stone  of  high  f|uality. 
Xo  one  seemed  able  to  give  more  than  a  guess  at  its 
value,  but  the  opinion  was  unanimous  that  onl\-  some 
rich  and  powerful  nation  could  ])urchase  it.  to  adorn  a 
sce])tcr  or  a  crown.  All  of  these  companies  were  merely 
marking  time,  waiting  till  the  great,  proA'cd,  unques- 
tioned company  should  say  "l)lay  ball"  aiul  start  a  specu- 
lative market  for  everyone. 

lint  no  such  misfortune  hai)pened.  On  November  11 
a  telegram  was  received  from  Clarence  King  by  the 
])rcsident  of  the  San  Francisco  and  New  York  Alining 
and  L'ommercial  Company  dated  froiu  a  small  station  in 
W'xoming  stating  that  the  diamond  fields  were  fraudu- 
lent and  plainly  "salted."  This,  of  course,  caused  a 
wild  excitement  among  the  officers  of  the  company. 
The}'  held  a  hurried  meeting.  They  were  simjily  stumied. 
King  was  reached  b}'  wire  at  once,  and  agreed  to  take 
a  part}'  in  and  prove  his  statements.  A  party  was  at 
once  organized  for  this  puri)ose.  The  members  were 
Henry  Janin,  D.  D.  Colton,  lohn  W.  r>ost  and  F.  Al. 
Fry.  ' 

Clarence  King  was  a  geologist  and  engineer  in  the 
service  of  the  United  States  Governmeni.  a  man  of  some 
professional  distinction  and  of  talent  in  the  literar\'  line, 
it  iN  worlh}'  of  note  here  that  some  }'ears  after  the  dia- 
mond slor\'  broke.  King  wrole  a  perlerx'id  narrati\(.'  c'U- 
tilled   "Abnintaineering  in   the    I  ligh    Sierra>."      In    it   he 

234 


Rude  Awakening  Follows   Dream 

described  an  ascent  of  Monnt  Whitney,  tlie  liii;hest 
peak  in  California,  and  drai^i^ed  himself  through  a  scries 
of  hair-l)readth  escapes  that  ])nt  every  Al])ine  adventnre 
in  the  shade.  A  ^eoloj^ist  li\'  the  name  of  W.  A.  (jood- 
year  knew  something-  of  the  reg"ion,  visited  ATonnt  Whit- 
ney, made  the  ascent  on  a  mnle  with  settled  haljits  of 
reflection  and  never  dismounted  till  he  reached  the  to]). 
])roving-  that  King-  had  never  been  there  at  all.  All  of 
this  Goodyear  descri1)ed  in  a  widely  circulatcfl  maga- 
zine. The  laugh  that  followed  broke  King's  heart.  He 
died  a  few  months  later. 

It  was  this  same  gentleman  who  late  in  the  fall  of 
1872  made  u])  his  mind  to  have  a  look  at  the  diamonfl 
fields.  Notwithstanding  all  of  our  attempted  secrecy,  al- 
most anyone  could  place  his  finger  on  our  claims.  Not 
only  that,  but  at  least  two  men,  Uerry  and  AlcClellan. 
had  actually  been  at  the  fields,  saw  the  old  washings  and 
the  tools  left  by  the  Roberts  partw  and  it  was  one  of 
these  who  guided  Mr.  King  to  the  spot. 

Mr.  King's  story  makes  the  discovery  of  the  fraud 
rather  a  matter  of  deductive  reasoning,  whereby  little 
straws  of  evidence  are  put  together  one  by  one  and 
formed  into  the  nest  that  holds  the  egg  of  ])roof.  It 
is  easier  to  construct  this  nest  afterwards  than  before. 
I  heard  myself  a  somewhat  dififerent  version  of  the 
story.  In  company  with  Air.  King  went  a  middle-aged 
German,  a  sort  of  cross  between  a  camp  follower  and  a 
friend.  Like  a  "super"  in  a  great  dramatic  perform- 
ance, he  did  not  cut  a  very  large  figure.  P)Ut  many. 
years  afterward  I  met  him  in  New  York  and  he  told  me 
a    very    interesting    story.      On    reaching    the    diamond 

235 


The  Great  Diamond  Hoax 

fields,  he  said,  notwithstanding'  the  intense  eold  weather. 
both  he  and  Mr.  King"  began  washing  for  diamonds,  and 
naturally  enough  found  what  they  were  looking  for.  In 
fact,  the  geologist  came  very  near  being  fooled  as  badl\- 
as  anyone  else — wanted  to  leave  instantlw  and  tliought 
of  going  to  San  l*>ancisco  to  liave  a  talk  with  the  di- 
rectors of  the  company.  I'.ut  the  ( leniian  gentleman  felt 
dififerently.  He  was  not  overburdened  with  wealth, 
had  never  been  in  any  i)lare  before  where  tliamonds 
could  be  picked  u])  without  even  saying,  "by  your  leave." 
and  he  was  naturally  averse  to  leaving  a  place  so  full  of 
delightful  possibilities.  So  he  arranged  a  brief  respite 
before  departure.  In  the  meantime  he  was  washing 
"dirt"  to  beat  the  band  and  every  now  and  then  pocket- 
ing" a  sparkler  that  he  valued  at  a  small  fortune.  Sud- 
denly he  came  on  a  stone  that  caught  his  eve  and  filled 
him  with  wonderment.  it  l)ore  the  ])lain  marks  of  the 
]ai)idary's  art.  lie  took  it  immediately  to  his  j)rinci])al. 
"Look  here.  INIr.  King."  he  said.  "This  is  tlie  bulliot 
diamond  field  as  never  vas.  It  not  only  ])rodnces  dia- 
monds, liut  cuts  them  moreover  also." 

King  grabbed  the  half-cut  diamond.  Ever\thing  was 
clear  as  da}'.  P)eyond  the  ])eradventure  of  a  doubt  the 
fields  w'ere  salted.  He  hunted  out  evidence  that  he  had 
overlooked  before,  and  very  soon  was  in  possession  of 
proof  (|uile  aside  from  the  partly  cut  gem.  that  a  whole- 
sale fraud  had  been  committed. 

T  aifi  not  giving  tliis  stor\-  as  a  fact — sim])l\-  offering  it 
lor  what  it  is  worth,  and  certainK'  without  an\"  desire 
to  detract  from  the  great  service  rendered  b\-  Cdarence 
King. 

236 


Rude   Awakcniiii^   Follows   Dream 

Mr.  Kinj4  reached  ihc  diaiiiond  fields  on  Xox-eniher  2, 
1872.  On  .\()\'enil)(- r  10  he  was  back  to  the  raih-oad  and 
sent  the  famous  dispatch — that  the  conipanx-  was  duped. 

Also  he  waited  for  Messrs.  Janin,  Colton,  Host  and 
Fry.  the  ])arty  sent  from  California.  The)-  went  to<j;ether 
to  the  diamond  fields  and  the  now  i)lain  nature  of  the 
plot  was  thorout^hly  exposed.  It  is  not  necessary  to  s^o 
into  an\'  of  Mr.  Kind's  ,i4eoloy,ical  conclusions  or  the 
entire  evidence  upon  which  the  conclusion  was  reached. 
Two  or  three  facts  are  enough  to  indicate  the  satisfac- 
tor}-  nature  of  the  proof. 

Mention  has  been  made  of  ant-hills  sparkling  with 
minute  but  veritable  diamond  and  ruby  dust.  Perhaps 
because  they  were  so  pretty  no  one  ever  disturbed  them. 
But  if  somebody  had  taken  a  notion  to  give  one  of  them 
a  kick  their  sup]:)osititious  nature  would  have  been  a])- 
parent.  They  weren't  ant-hills  at  all.  They  w^ere  fakes  ; 
the  work  of  a  sinful  man,  not  of  the  moral  insect. 
They  were  also  works  of  art :  no  one  would  have  sus- 
pected guile  from  looking  at  them. 

A  close  examination  revealed  three  holes  evidently 
made  with  a  stick  or  some  sharp  instrument,  at  the  bot- 
tom of  each  of  which  a  gem  rested.  There  is  little 
doubt  that  all  the  "salting"  was  done  in  this  way,  ex- 
cept that  as  a  rule  the  holes  were  carefully  closed.  But 
in  .such  extensive  operation.^  a  little  reckless  work  was 
likely  to  slip  in. 

Finally,  on  the  to])  of  a  large  flat  rock,  several  rubies 
and  diamonds  were  found  pressed  into  crevices  to  hold 
them  in  place.  This  was  so  grotesquely  raw  that  it 
seems   incredible,   and   led   to   a   story   that   some   of   the 

237 


The  Great  Diamond  Hoax 

diamonds  were  in  the  forks  of  trees.  Unfortunately  for 
the  storv.  there  weren't  any  trees  in  the  neighborhood. 

Tlie  partx'  returned  to  San  l-'rancisco  late  in  Novem- 
ber. (  )n  the  25th  of  that  month  the  general  facts  were 
given  to  the  press,  that  the  diamond  fields  were  a  fraud, 
and  that  everyone  had  been  taken  in.  The  excitement 
was  intense.  The  Associated  Press  kept  the  wires  hum- 
ming with  the  news  for  days,  transmitting  fuller  reports 
than  were  published  here,  although  the  local  papers 
printed  whole  pages.  Wherever  a  printing  press  ran, 
the  world  knew  the  story  of  the  diamond  fraud. 

The  trustees  of  the  San  Francisco  and  New  York 
Alining  and  Commercial  Company  held  various  meetings 
and  a  select  investigating  committee  w'as  appointed.  W. 
H.  L.  Barnes  was  the  company's  regular  attorney. 
Messrs.  Hall  McAllister  and  S.  M.  Wilson  were  added 
to  the  staff  to  ferret  out  and  inmish  those  guilt}'  of  the 
fraud.  Everyone  connected  with  the  early  history  of  the 
transaction  gave  testimony,  every  line  of  evidence  was 
hunted  down. 

Among  other  things,  an  accomplice  came  forward  by 
the  name  of  Cooper,  who  admitted  with  noble  candor 
that  he  was  the  author  of  the  whole  scheme,  though 
unrighteousl}'  de])rived  b}-  his  welching  ])artners  of  his 
just  share  of  the  spoils.  Salting  mines  was  the  com- 
monest thing  in  the  past,  and  isn't  }'et  to  be  classed  with 
the  lost  arts.  Talking  with  Arnold  and  Clark,  whom  he 
knew  personally,  of  how  the  "salting"  of  gold  and  silver 
mines  had  been  overworked,  he  suggested  the  "salting" 
of  a  diamond  field  as  a  i)leasing  variation,  and  told  how- 
small    diamonds,    such    as    those    used    for    drills,    could 

238 


MILTON    S.     LATHAM 

Former   Governor   and    U.    S.    Senator 

director   of    Diamond    Co. 


Rude  Awakening  Follows   Dream 

be  readily  obtained.  Accordinj^'  to  bis  story,  .Vnujld  and 
Slack  bit  greedily  and  a  triumvirate  was  formed  to 
carry  on  tbe  fraud.  Tbis  was  nearl}-  two  years  before 
the  Janin  examination.  Cooper  was  undoubtedly  a  con- 
federate, did  a  lot  of  advising  and  suggesting,  but  was 
kept  in  the  dark  concerning  the  most  important  details. 
Also,  he  was  promised  a  liberal  share  in  the  booty  and 
his  confession  was  prompted  chiefly  by  a  desire  for  re- 
venge. He  gave  Arnold  and  Slack  the  full  credit  for 
everything. 

The  statement  of  Coo]jer  was  made  not  only  to  the 
s])ecial  investigating  committee,  but  also  to  the  grand 
jury  of  San  bVancisco.     The  latter  body  indicted  no  one. 

On  November  17  the  trustees  of  the  San  Francisco 
and  Xew  York  Mining  and  Commercial  Company  met 
for  the  last  time.  At  this  session  it  made  a  final  report 
to  the  ]niblic,  giving  its  brief  historv,  the  confidence 
]:)laced  in  Tiffany  appraisement  and  the  report  of  Janin  ; 
the  final  statement  that  the  properties  it  claimed  to  be 
diamondiferous  were  "salted"  and  that  everyone  had 
been  cleverly  duped.  All  its  business  was  summarily  sus- 
pended and  its  attorneys  ordered  to  wind  u])  its  busi- 
ness at  once. 

Appended  to  the  re])ort  were  statements  from  Clar- 
ence King',  describing  his  discoveries,  from  Henry  Janin. 
confirming  Clarence  King,  and  admitting  his  former  er- 
rors ;  also  from  ^Messrs.  Colton.  Fry  and  I)Ost,  all  de- 
nouncing the  fraud. 

If  anything  were  lacking,  news  came  from  Londcjn 
that  the  diamonds  we  had  sent  there  were  coarse,  almost 
valueless  "niggerheads"    from   the  South   African   fields. 

241 


The  Great  Diamond  Hoax 

and    had    hrcii    j)urcliased    in    l)ull<    tlierc    from    a    dcak-r 
ncarU'  a  \car  Ijcfore,  who  idcnlit'icd  tlicm  ])crlectly. 

TIk-  late  (Hamond  niilhonaircs,  who  lia<l  l)een  rather 
chest\-,  presented  a  sad  s])ectacle  on  the  street.  T]ie_\- 
were  pnrsued  everywhere  with  jihes  and  jokes.  Some  of 
them  went  into  retirement  till  the  storm  l)lew  over.  There 
never  was  a  better  illnstration  of  the  joy  to  ])e  found  in 
triumnliini'"  over  the  sorrow  and  discomfiture  of  others. 


242 


CHAPTER  XXXII. 

Victim  of  Big  Swindle  Explains  How  Rough 
AliNEKS  Managed  to  Deceive  Men  Like  Tiffany 
y\ND  Janin. 

Inquiry  Reveals  Tliat  "Saltliii^"  of  Diamond  Field  Cost 
Plotters  $j^^,ooo  and  Melded  $600,000  Net  Profit. 

How  so  many  of  the  shrewdest  men  in  the  world 
could  have  heen  absolutely  duped  1)\-  the  i^reat  diamond 
fraud  may  well  be  asked.  Idie  truth  is  it  succeeded  not 
because  of  the  baleful  craft  employed  in  working  out 
its  details,  but  because  of  a  rawness  that  seemed  to 
disarm  rather  than  arouse  suspicion  and  the  audacity 
and  nerve  with  which  everything'  was  carried  out.  That 
diamonds,  rubies,  emeralds  and  sapphires  were  found 
associated  together — geuLs  found  elsewhere  in  the  world 
under  widely  different  geological  conditions — was  a  fact 
that  ought  to  have  made  a  goat  do  some  responsible 
thinking.  But  it  seems  to  have  been  entirely  over- 
looked by  Tiffany,  by  Janin,  by  the  house  of  Rothschild, 
to  say  nothing  of  Ralston,  Sam  Barlow,  General  Mc- 
Clellan,  General  Butler,  William  M.  Lent,  General 
Dodge,  the  twenty-five  hard-headed  business  men  of 
San  I'rancisco  who  cheerfully  invested  $2,000,000  in 
the  stock  and  the  fifteen  mining  men  who  accompanied 
Mr.  Roberts  to  the  fields,  after  the  San  Erancisco  and 
New   York   Mining  and   Commercial   Company   was   or- 

243 


The  Great  Diamond  Hoax 

.^anizcd.  1  iad  serious  altcntion  ever  l)ecii  directcil  to 
that  single  ])oiiit  it  certainly  would  have  ])r()ni])te(l 
an   investigation  that  must  Iia\'e  ended  in  ex|)osure. 

Again,  the  Tittan\  a])])raisement  of  $150,000  on  not 
more  than  a  tenth  of  the  gems  actually  on  hand  is  hard 
to  comprehend,  imless  regarded  in  connection  with  an- 
other fact — that  valuing"  cut  stones  and  valuing  stones 
in  the  rough  are  \videl\-  ditterent  matters.  While  the 
Tiffany  establishment  had  undoubted  experts  as  to  tlie 
finished  diamond,  it  is  dou])tful  whether  a  single  real 
expert  valuer  of  rough  diamonds  was  to  be  found  in  the 
L'nited  States.  All  the  lai)idar_\-  work  of  the  world  was 
then  done  principally  in  Amsterdam,  with  smaller  estab- 
lishments in  Paris  and  London.  As  I  imderstood  later, 
the  Tiff'an\-  experts  satisfied  themselves  that  the  stones 
were  actually  diamonds,  weighed  them,  estimated  the 
cost  of  ctitting;  and  net  weight,  applied  the  usual  rules 
for  valuation,  which  increases  enormousl}'  with  the  size 
of  the  stone,  made  a  large  deduction  and  let  it  go  at 
that.  Thus  the  total  of  $150,000  was  arrived  at.  Know- 
ing the  immense  reserves  we  had  in  .^an  l-~rancisco.  the 
question  of  fraud  i:)robabl\-  never  entered  their  minds. 
For,  althoug;h  much  ingenuity  and  some  money  had  been 
invested  in  the  enterprise  of  palming'  off  worthless 
mining'  properties,  it  seemed  the  height  of  absurdity  to 
suppose  that  anyone  had  invested  a  million  and  a  half 
dollars  in  "salt." 

And.  to  do  justice  to  Henry  Janin.  I  think  it  was  this 
valuation  that  disarmed  his  suspicions  and  made  hini  less 
eager  to  search  for  traces  of  chicane,  lie  said  several 
times  on   the   if)urne\-  to  the  diamond  fields  that   he  con- 

244 


Victim   of   Big   Swindle   Explains 

sidered  their  ,L;cnuine  character  estal)hslK'(l  ;  lliat  his 
mission  was  mainly  to  estimate  their  extent  and  probable 
value.  As  to  that,  the  washings  we  made  might  well 
have  satisfied  an\-  man.  Perhaps  had  he  remained  at  the 
discovery  claim,  instead  of  exploring'  the  country  in  the 
neighborhood,  he  mig'ht  have  detected  traces  of  fraud. 
J')Ut  he  considered  the  most  essential  thing"  was  an  ex- 
amination to  determine  tlie  diamondiferous  area,  so  that 
his   employers   might  ultimately  get   it   all. 

Yet  the  most  convincing"  factor  of  all  was  the  attitude 
of  the  men  themselves.  Arnold  was  no  ordinary  mortal. 
Throughout  all  the  negotiations,  coming  in  contact  with 
some  of  the  most  alert  intellects  of  the  time,  he  was 
always  serene,  ready,  confident — did  not  make  a  single 
break.  Besides  he  had  an  air  of  simple,  rugged  honesty 
that  impressed  everyone  he  met.  General  Dodge,  who 
thought  meanly  of  human  nature,  said  in  a  ])rinted  inter- 
view that  he  would  stake  his  life  on  Arnold's  integrity. 
Not  only  that,  but  Arnold  and  Slack  were  willing",  even 
eager,  to  submit  the  diamonds  to  any  test  and  to  lead  a 
])art\'  of  experts  to  the  fields,  under  proper  guaranty 
that  their  rights  would  be  protected.  The\'  seemed  al- 
most exultant  when  they  understood  that  Titfany  would 
value  the  diamonds.  That,  of  course,  would  settle  every- 
thing, they  said.  They  were  equally  delighted  at  the 
choice  of  Janin  as  an  expert.  Both  of  them  had  the 
dramatic  gift  highly  developed.  ( )n  the  stage  they  might 
have  made  the  most  famous  actors  of  any  time. 

And  how  did  a  couple  of  ordinary  prospectors  secure 
the  very  large  sum  undoubtedly  used  to  finance  the  glit- 
tering fraud  ?     That  was  a  question  that  puzzled  many 

245 


The  Great  Diamond  Hoax 

and  led  to  all  kinds  of  surmises  about  confederates, 
syndicates,  and  so  forth.  I'.ut  it  was  shown  later  that 
in  1870  Arnold  and  Slack  made  a  couple  of  luck\-  turns 
at  selling"  mines  and  actually  had  at  one  time  in  excess 
of  $50,000  to  their  credit  in  a  Western  bank.  This  de- 
l)osit  was  witlidrawn  in  hulk  and  was  never  traced  after- 
wards, excei)t  in  the  inu'chase  of  diam()nd>  in  the  mar- 
kets of  Amsterdam  and  London. 

Through  the  agency  of  1.  W.  Lees,  this  end  of  the 
transaction  was  full\-  traced  and  the  facts  published. 
Arnold  made  two  trijjs  to  Europe  to  j^urchase  gems. 
Uoth  times  he  shrewdly  avcMded  American  i)orts.  sailing 
and  returning  by  way  of  Halifax.  ]li>  first  visit  was 
made  in  the  fall  of  1870.  That  time  he  confined  his 
activities  to  Amsterdam  and  showed  great  shrewdness 
in  concealing  his  tracks  and  avoiding  suspicion.  He 
visited  the  various  gem-cutting  establishments,  bought 
many  coarse  stones,  but  not  enough  from  an\-  one  firm 
to  make  the  transaction  look  unusual.  \o  one  seemed 
to  know  his  name,  but  his  i)hotogra])h  was  at  once 
identified  b_\-  many  diamond  dealers  of  Amsterdam  as  the 
eccentric  ])erson  who  seemed  to  have  an  unusual  penchant 
for  inferior  stones.  He  was  regarded  as  a  newlv-rich 
American  with  a  vulgar  taste  for  ostentation,  who 
wished  to  over])urden  hi>  family  and  dazzle  his  fellow- 
coiintr\-men  with  a  wealth  of  cheap,  .almost  worthless 
gems. 

(  )n  his  second  Iri])  in  the  earl\-  wintei'  of  1872.  Arnold 
went  direct  to  London,  and  tliere.  while  the  conspiracy 
was  at  the  most  ticklish  jxtint.  lie  threw  all  caution  to 
the    winds.       (  )ik'    of    die    largest    dealers    in     the    great 

246 


WM.     BABCOCK 

A    foremost    San     Franciscan, 

director   of    Diamond    Co. 

Victim   of    Bi^   Swindle    Plxplains 

nielropolis  i;a\e  the  story  to  the  press  how  one  after- 
noon a  rather  r<)U,t4h-lf)okini4'  American  a])]ieare(l  at  lh> 
place  of  business  and  asked  to  l)e  shown  what  tliey  had 
in  the  way  of  underj^rade  or  ratlier  refuse  diamonds. 
He  was  shown  a  lar^e  stock  of  South  African  stones  of 
tlie  (|uality  known  as  "niggerheads,"  handsome  enough, 
Init  of  very  small  commercial  value.  The  American 
pawed  over  them  apparently  without  the  least  regard 
for  size  or  quality  until  he  had  collected  a  great  pile. 
Then  he  asked  indifferently.  "How  much  for  the  lot?" 

The  trader  hadn't  the  least  conception  that  his  cus- 
tomer meant  business.  However,  he  made  a  rajMcl  ap- 
praisement of  the  stones  and  gave  the  price  at  £3000. 
or  $15,000.  To  his  amazement,  the  American  produced 
a  huge  bank  roll,  counted  oft'  the  money,  had  the 
diamonds  packed  in  small  sacks,  which  lie  deposited  in 
the  capacious  pockets  of  an  overcoat  and  elsewhere,  said 
good-day  and  departed.  In  the  photograph  of  Arnold, 
the  English  trader  recognized  his  customer  at  once. 

As  near  as  anyone  could  estimate,  about  $35,000  was 
invested  in  "salting"  the  claims.  To  this  should  l^e 
added  something  for  traveling  expenses,  etc.  The  men 
received  approximately  $660,000.  That  left  a  little  over 
$600,000  net  profit. 


249 


CHAl^l'I^R   XXXTTT. 

I'kinc  ii'Ai.  IX  DiA.MoxD  Sw I x DM-:  Goes  I.ack  to  His 
(  )i.i)  Ilo.Mi':  Tx  Kkxti'ckv  to  ^^XJo^■  I  Iakd-I'^xrxi".!) 
Ric  iii'is. 

I'icfiiiis  fh-iii:^  Suit  for  $^^jo.oo(>,  Ihit  .Iniohl  Is  Pof'iihir 
With    .\'cii:;/ilH)rs  ami   I'orccs   Coinfroinisc. 

After  Anidld  received  his  final  ])a\-nient  of  $300,000 
lie  retired  to  his  old  home  at  Elizabethtown  in  Hardin 
connty,  Kentucky,  bought  a  fine  ])iece  of  land  and  also 
a  safe,  which  he  ke])t  in  his  house  imder  strong  guard. 
In  this  he  deposited  nearly  all  his  s]Joils,  although  he 
also  had  a  tidy  balance  in  the  local  bank,  which  added 
greatly  to  liis  repute  among'  his  neighljors.  lie  liad  a 
host  of  relatives  in  Hardin  count\-,  wliich  borders  on  the 
primitive  section  of  Kentucky.  It  was  there  that  the 
most  capable  of  Morgan's  guerrillas  were  recruited  and 
there  most  of  them  returned.  Anyone  hunting-  troul)le  in 
that  locality  was  almost  sure  to  find  it.  Arnold  settled 
down  (|uietl_\'  among  his  friends  and  relatives  to  enjov  the 
fruits  of  a  toilsome  life. 

Mis  ])lace  of  residence  was  well  known.  In  fact,  the 
Keutuck)-  pa])ers  gave  some  ])rominence  to  the  return  of 
this  famous  discoverer  of  diamond  fields  to  the  liome  of 
liis  ancestors.  When  the  luibble  l)urst,  Mr.  Lent  hur- 
ried to  l\entuck\-,  liired  eminent  counsel — judge  i  hirlan. 
later    a    justice    of    the    Su])reme    COurt    of    the    I'liitcMl 

250 


Swindler  Enjoys   Hard-Earned  Riches 

States,  and  lienjamin  llristow,  a  law  \cr  of  (.'(lual  stand- 
ing'— l)r()Uglit  snit  against  Arnold  for  $350,000  on  his 
personal  account  and  levied  an  attachment  on  his  ])roi)- 
erty.  All  of  these  proceedings  are  set  forth  in  the  T.ouis- 
villc  journal  of  December  18,  1872.  Two  days  later  the 
same  paper  published  a  long  statement  from  Arnold,  in 
which  he  denounced  in  unmeasured  terms  the  outrage 
that  had  been  committed  on  his  rights.  He  scored  "liill" 
Lent  in  language  of  scant  courtesy,  but  of  picturesque 
Western  expressiveness,  and  declared  he  neither  owed 
him  $350,000  nor  the  like  number  of  cents,  or  any  other 
sum,  for  the  matter  of  that. 

Arnold  went  on  to  say  that  his  safe  contained  $550,- 
000,  the  result  of  arduous  lalior  as  a  ])rospector  and 
miner  in  the  Far  West,  not  to  mention  his  bank  account 
and  real  estate.  The  sequestration  of  the  same  hx  a 
shark  or  an  ag'g'regation  of  sharks  from  California  he 
looked  upon  as  an  outrage  unparalleled  in  history.  He 
went  into  the  diamond  field  story  in  detail,  denied  that 
he  had  ever  "salted"  it  or  that  it  had  ever  been  "salted" 
at  all.  He  appended  Janin's  report,  the  Tiffany  appraise- 
ment and  a  long  extract  from  the  San  Francisco  Chron- 
icle to  prove  that  he  had  turned  over  an  absolutely  valid 
diamond  property  to  the  San  Francisco  and  New  A'ork 
Mining-  and  Commercial  Company,  and  that  if  anyone 
"salted"  it,  the  diabolical  act  must  have  been  done  after 
the  experts'  examination  and  by  some  of  the  "California 
scamps." 

Did  Arnold  suffer  any  in  the  estimation  of  his  com- 
patriots by  reason  of  the  grave  accusations  preferred 
against  him  ?    Rather  the  reverse.     They  gloried  in  what 

251 


'I'he  Great  Diamoiui   Hoax 

thev  were  pleased  to  call  his  ■■s])uiik."  'i'he  old  Mori^an 
raiders  and  thousands  of  their  \\a\-  of  ihiiikinL;-  looked 
witli  pride,  almost  with  reverence,  on  one  of  their  kind 
with  nerve  and  wit  enoui^h  to  make  a  foray  into  Vankee- 
don^  and  hrino;-  away  more  than  half  a  million  in  s])oils. 
To  tell  the  truth.  Arnold  was  the  \-cry  hero  of  the  hour, 
for  the  old  war  feeling  was  still  rampant. 

1  followed  Lent  to  Kentucky,  whither  al>-o  went  Cap- 
tain I.  W.  Lees.  l-"amiliar  with  the  fieUl,  after  some 
investigation  of  the  state  of  i)u])lic  opinion  in  Hardin 
countv,  1  am  satisfied  that  had  Arnold  stood  his  ground 
unflinchingly  not  a  dollar  could  have  been  wrung  from 
liim  h}-  legal  proceedings,  no  matter  what  the  proof. 
And,  moreover,  at  that  time  the  matter  of  exact  proof 
was  not  as  easy  as  later  on. 

Negotiations  leading  to  a  compromise  took  place  in 
which  1  ])layed  a  p'AVt.  These  resulted  in  a  compromise 
h\-  which  Arnold  surrendered  $1.^0.000  on  consideration 
of  immunitv  from  further  litigation.  The  money  was 
turned  over  to  Air.  Lent  i)ersonallw  What  disposition 
was  made  of  it  I  am  not  intormed.  hut  understood  that 
it  was  retained  1)\-  the  recii)ient  to  make  good  his  per- 
sonal loss. 

So  .\rnold.  left,  according  to  his  own  >tatement>.  with 
an  uncontested  fortune  of  nearly  half  a  million  dollars, 
everywhere  enjoNed  the  esteem  and  high  res])ect  which 
broadcloth  and  a  large  cash  balance  invariably  inspire. 
Hut  he  did  not  live  h)ng  to  enjoy  ])ros])erit\'.  Arnold, 
among  other  ambitions,  wanted  to  shine  in  hnance,  and 
for  this  puri)ose  o])ened  a  bank'  in  bdizabethtown.  and 
for  a  time  did  a  rushing  trade,  to  the  great   irritation  ot 

252 


Swindler  Enjoys  Hard-Earned   Riches 

his  business  rivals.  TIk-  (|uarrel  became  very  bitter,  and 
as  differences  of  o])inion  were  only  arl)itrate(l  in  one  way 
in  Hardin  county  at  the  period  mentioned,  the  first  time 
Arnold  met  one  of  his  competitors  the  two  opened  fire 
at  each  other  on  the  street,  after  the  manner  of  the  l)est 
traditions.  Arnold  never  lacked  courage,  and  had  all  the 
best  of  the  arbitration,  having-  wing-ed  his  man  once, 
when  his  antagonist's  partner  appeared  in  a  doorway 
and  landed  the  greater  portion  of  a  charge  of  buckshot 
in  the  diamond  discoverer's  shoulder.  His  wounds  were 
considered  fatal,  but  his  irt)n  constitution  carried  him  far 
toward  recovery,  and  he  was  considering'  with  pleasant 
anticipation  a  second  meeting-  with  the  bankers,  with 
sixshooters  instead  of  a  clearing'-house  to  balance  the 
account,  when  he  was  seized  with  pneumonia.  Under 
this  last  affliction  the  tough  old  campaigner,  after  a 
hard  struggle,  w'cakened  and  died.  This  happened.  I 
think,  near  the  close  of  1873,  so  that  Arnold's  prosperity 
was  short-lived. 

What  became  of  Slack?  That  was  a  question  often 
asked,  but  never  answered  in  a  satisfactory  way.  As  I 
said,  the  last  time  I  ever  saw  him  was  when  I  left  the 
diamond  fields  with  the  Janin  party.  He  and  Rubery 
remained  behind.  When  these  two  separated  Rubery 
came  to  San  Francisco,  while  Slack  took  an  eastbound 
train.  Many  attempts  were  made  to  locate  him  at  a 
later  day.  He  was  heard  from  at  various  points — St. 
Louis,  New  Orleans,  j\Iem])his  and  Mobile.  Always  it 
turned  out  to  be  another  Slack.  Finally  the  imj^ression 
became  general  that  he  must  have  gone  abroacl  and  hid 
his  identity  in  another  land. 

253 


The  Great  Diamond  Hoax 

l')Ut  the  straiii^c  ])art  of  it  was  that  Arnold  had  all  the 
money,  or  ncarl\-  all  of  it.  as  appears  by  his  sij^ncd  state- 
ments and  later  by  the  inventory  of  his  estate,  which 
corresponded.  ^Irant^n^■  every  j^ossible  contint^enoy.  the 
share  of  Slack  was  either  ])racticall}'  nothini^'  or  very 
small,  not  to  exceed  $30,000  at  the  utmost.  As  they 
always  figured  as  partners,  and  as  Slack,  thoui^h  not  the 
spokesman,  appeared  a  man  of  force,  1  have  always  con- 
sidered that  a  dee])  mystery  huni;'  over  hi<  fate.  It  seems 
not  imlikely  that  he  died  .somewhere  in  the  Western 
coimlrv,  probably  among  strangers,  and  ne\'er  i)artici- 
])ated   in  the  profits  of  the  diamond   fraud  at   all. 


254 


ciiai'Ti-:k  xxxiw 

DiA.Moxi)  I'KAri)  Loss  Falls  on  Siiori. dicks  oi-  (  )ki(;- 
ixAL  Dlpes;  Ralston  Reimburses  Ali,  Stock- 
holders. 

Gossips  Make  Uiijiis!  Chari^c  .li^aiiist  Men   Who  .Ictcd 
In  Good  Faith  and  Were  JJeceii-ed  by  Swindlers. 

The  losses  growing"  out  of  the  diamond  fraud  fell  on 
tile  shoulders  of  the  original  du])es — W.  C.  Ralston,  Wil- 
liam M.  Lent,  George  Dodge  and  myself.  My  impres- 
sion is  that  the  mone\'  o])tained  h\'  Air.  Lent  from  Ar- 
nold very  nearly,  if  not  (|uite,  halanced  his  aecount.  Per- 
haps he  may  have  given  a  ])ortion  of  this  to  ( ieneral 
Dodge,  his  business  associate.  Air.  Ralston  promptly 
paid  the  twenty-five  stockholders  who  subscribed  $2,000,- 
000  for  a  half  interest  in  the  company,  dollar  for  dollar. 
Xot  a  man  of  them  lost  a  cent.  This  involved  a  .-sacrifice 
of  die  last  $300,000  paid  to  Arnold  and  Slack.  Mr. 
Ralston  hacl  the  receipts  in  full  of  the  various  parties 
neatly  framed  and  T  am  told  that  it  was  one  of  the 
mural  decorations  of  liis  i)i-ivate  office  in  the  Bank  of 
I'alifornia.  The  remaining  balance  of  loss  was  borne  1)\- 
Mr.   Roberts  and  m\self. 

The  diamond  fraud  story  h.as  covered  acres  of  news- 
paper space.  This,  however,  is  the  first  time  that  the 
narrative  has  been  told  from  start  to  finish,  all  the  facts 

255 


The  Great  Diamond  Hoax 

a.ssem1)lc<l  in  connected  form.  I'^rom  what  has  gone  he- 
fore,  certain  points  stand  out  in  hold  rehef. 

The  scheme,  or  rather  the  execution  of  the  scheme, 
was  anything-  but  the  work  of  a  far-seeing,  skilful  and 
well-informed  mind.  Nothing  can  illustrate  this  better 
than  the  supreme  folly  of  planting  diamonds,  rubies, 
emeralds  and  sapphires  in  the  same  matrix.  A  capable 
rogue  would  have  consulted  the  history  of  mining  for 
precious  stones  and  would  have  readily  discovered  that 
they  are  never  found  associated  in  the  same  formation. 
This  would  have  enabled  him  to  avoid  a  raw  monstrosit\- 
that  should  have  led  to  exposure  at  the  very  start.  Much 
of  the  other  work  was  raw,  as.  for  instance,  the  diamond 
and  ruby  spangled  ant-hills  and  the  flat  rock,  whose 
fissures  were  studded  with  precious  stones.  A  plain, 
unornamented  diamond  held  would  have  presented  a  far 
better  baited  hook. 

It  can  be  shown  by  authenticated  documentary  evi- 
dence that  Slack  and  Arnold  were  the  sole  beneficiaries 
of  the  loot.  In  fact,  some  doubt  exists  whether  Slack 
was  a  participant  at  all.  Outside  the  sum  that  Lent  col- 
lected, the  balance  was  transmitted  to  Arnold's  heirs,  as 
the  records  of  Hardin  county,   Kentucky,  prove. 

Again,  if  any  other  actor  in  the  drama  had  the  least 
foreknowledge  of  the  fraud,  he  surely  would  have  parted 
with  his  interest  while  the  market  was  booming — before 
the  frail  bubble  burst.  When  the  coarse  diamonds  were 
sent  to  London,  nothing  could  be  more  certain  than  their 
immediate  identification  as  nearly  valueless  South  Afri- 
can stones.  Yet  not  a  share  of  stock  was  sold.  Kvery 
reasonable  presmni)tion  i)ointed  to  the  entire  good   faith 

256 


Ralston   Reimburses  All   Stockholders 

of  all,  so  far  as  the  San  Francisco  and  New  York 
JMining  and  Commercial  Company  and  its  stockholders 
were  concerned. 

Finally,  it  is  conceivable  only  on  the  basis  of  down- 
right madness,  that  any  man  with  wealth,  reputation  and 
self-respect,  in  short,  with  everything  to  lose,  could  have 
conceived  and  carried  out  such  a  reckless  plot.  If  by 
any  chance  it  had  succeeded,  if  the  diamond  company's 
stock  had  been  exploited  on  the  stock  market,  there  was 
not  a  place  upon  the  earth  so  desolate  and  remote  but 
that  the  vengeance  of  mankind  would  have  found  him 
out.  It  was  the  evident  design  of  a  rather  crude  intel- 
ligence utterly  regardless  of  consequences,  and  counting 
on  obscurity  to  make  good. 

Nevertheless,  no  matter  how  plain  a  case  may  seem, 
no  matter  how  free  from  doubt  or  complication,  if  it  be 
only  big  enough  the  world  loves  to  build  around  it  a 
fairy  structure  of  mystery  or  romance.  Nothing  could 
be  more  evident  than  that  Arnold  and  Slack  were  the 
architects  of  their  own  work.  Yet  the  public  saw  fit  to 
cast  grave  suspicion  on  those  who  were  clearly  victims 
and  heavy  losers — the  only  ones  who  lost  a  cent.  Even 
Ralston,  although  he  paid  over  $300,000  to  make  good 
the  losses  of  the  stockholders,  was  more  or  less  under 
a  cloud.  Lent,  Roberts,  Dodge  and  myself  were  in 
turn  suspected.  At  last  public  opinion  seemed  to  settle 
down  to  a  conviction  that  the  guiding — "the  master 
mind" — was  mine. 

There  was  not  an  atom  of  valid  evidence  on  which  to 
raise  the  accusation.  On  this  side  of  the  Atlantic  it  was 
never  remotely  charged  in  any  responsible  paper,  to  my 

257 


The  Great  Diamond  Hoax 

knowledge.  The  conclusion  seemed  to  be  reached  very 
nuich  because  of  the  largeness  of  my  bushiess  under- 
taking's and  my  well-known  spirit  of  venture  in  com- 
mercial lines.  Therefore,  not  a  few  assumed  that  be- 
cause I  was  always  willing  to  take  what  might  be  called 
by  some  a  long  chance,  therefore,  I  must  have  been  the 
power  behind  the  scenes  with  Arnold  and  Slack. 

Not  arguing  the  case,  this  conclusion  had  to  put 
aside  many  well  known  facts,  as  I  said  before.  I  was 
a  man  of  large  wealth,  making  money  as  rapidly  as  was 
good  for  anyone,  so  that  the  financial  inducement  was 
not  there.  I  was  young,  only  32',  had  a  family  of  which 
I  was  proud,  had  the  best  possible  standing  with  busi- 
ness men,  both  in  San  Francisco  and  abroad.  Honor 
bright,  does  it  not  seem  incredible  that  a  man  situated 
like  myself,  full  of  ambition  and  with  everything  to  live 
for,  would  have  engaged  in  an  ignoble  plot  to  fleece  his 
friends  and  the  public,  a  jjlot  absolutely  certain  to  drag 
him  and  all  belonging  to  him  through  the  dust? 

The  story  would  have  died  a  natural  death  beyond 
any  question  just  as  it  did  in  the  case  of  my  fellow  vic- 
tims, had  not  the  London  Times  made  a  direct  accusa- 
tion of  complicity  in  the  diamond  fraud  against  Alfred 
Rubery  and  myself,  which  Ijccame  the  basis  of  a  famous 
lil)el  suit. 


258 


CHAPTER  XXXV. 

Baron  Grant  Bobs  Up  Again  ;  Tries  to  Get  Even  on 
Man  Who  Exposed  One  of  His  Big  Stock 
Swindles. 

Alfred  Rnhcry  Brings  Suit  Against  London  Times  for 
Libel  and  Is  Awarded  £10,000  as  Damages. 

In  the  charges  made  by  the  London  Times,  it  was  not 
difficuh  to  recognize  the  handiwork  of  my  old  enemies, 
Baron  Grant  and  the  financial  editor,  Samson.  The 
accusation  seemed  to  be  an  echo  of  the  old  Emma  Mine 
fight,  when  I  warned  the  public  against  the  exploitation 
of  a  worthless  property.  That  bubble  had  burst,  carry- 
ing ruin  to  investors,  disgrace  to  the  promoters  and  more 
than  a  decade  of  distrust  for  every  American  security  in 
European  markets.  But  the  sting  of  defeat  remained  and 
the  opportunity  to  retaliate  was  one  not  to  be  overlooked. 

Alfred  Rubery,  being  a  British  subject  in  good  stand- 
ing, brought  the  libel  suit  against  the  London  Times. 
As  my  intimate  and  close  companion  for  nine  months, 
covering  the  various  incidents  involved,  he  admitted  that 
whatever  involved  me  involved  himself  as  well.  Al- 
though the  earth  was  ransacked  for  evidence  to  connect 
us  with  the  fraud,  the  defense  absolutely  failed  to  sus- 
tain the  newspaper's  charges.  Not  only  that,  but  the 
proof  I  had  gathered,  as  described  in  a  previous  chapter 
showing  the  secret  bond  between  Baron  Grant  and  the 

259 


The  Great  Diamond  Hoax 

hnancial  writer.  \va>  thoroui^lily  exposed,  ending;'  in  the 
ruin  of  both.  Samson  was  (Hsniissed  in  (hsgrace  by  the 
London  Times.  Enouj^ii  was  shown  of  llaron  Grant's 
methods  to  involve  him  in  hiwsuits  innumerable  that 
stripped  him  of  his  fortune  in  the  end.  J  fe  did  Imsiness 
under  assume(l  names  lonii'  after,  but  never  with  his  old 
success. 

Heavy  damages  were  awarded  Rul)ery — the  sum.  if 
I  remember  right,  was  £10,000.  \'ears  afterwards  he 
moved  to  Australia,  and  as  J  never  heard  from  him 
after,  1  |)resume  that,  like  the  other  actors  in  the  dia- 
mond-field drama,  he  is  dead.  In  fact,  of  all  who  were 
in  any  material  way  connected  with  the  historic  incident 
— and  there  were  many — I   alone   survive. 

For  myself,  1  felt  crushed  beneath  the  burden  of 
vague  suspicion,  became  disgusted  with  life  in  general 
and  with  business  in  particular,  and  forme<l  a  determina- 
tion to  retire  penuanently  from  active  atTairs  at  once. 
With  this  end  in  view,  I  offered  my  extensive  Califor- 
nia holdings  on  a  dead  market  and  accepted  bargain 
prices.  M\"  controlling  interest  in  the  ^Montgomery 
Street  Land  Com])any  I  sold  to  Me>srs.  Ralston  an<l 
Sharon,  so  that  they  owned  share  and  share  alike.  I 
sold  a  great  acreage  of  tule  land  to  (ieorge  D.  Roberts, 
part  of  which  com])rises  what  is  known  as  Roberts 
Lland.  not  far  from  the  cit_\-  of  Stockton.  .\  large  es- 
tate around  llone\-  Lake  1  disposed  of  to  various  pur- 
chasers. .Scattering  investments  in  San  h'rancisco  were 
cleaned  u])  in  a  summary  wa\.  I  would  hardly  care 
to  know   what  all   these   ])roi)erties   are   worth   to-day. 

Jn   four  months  after  the  diamond   fraud  was  ex])osed 

260 


<€_     -"^^^tr 


/■ 


y^ 


MRS.     A.     HARPENDING 
At   age   of  30,    before    leaving 


San    Francisco 


Baron  Grant  Bobs  Up  Again 

I  had  converted  into  cash  everything  tangible  I  pos- 
sessed on  the  Pacific  Coast.  AUhoiigh  the  sacrifice  I 
made  was  enormous,  I  reaHzed  more  than  a  milhoii  and 
a  quarter  dollars,  which  was  as  good  or  better  tlian 
$5,000,000  to-day — a  fortune  ample  to  supply  the  most 
extensive  and  up-to-date  wants  of  modern  times. 

The  great  mistake  of  my  career,  entirely  apart  from 
monetary  reasons,  was  this  hastily  taken  resolution  to 
seek  the  shades  of  private  life.  Had  I  faced  the  music, 
like  all  the  rest — like  Ralston,  Lent,  Roberts,  Dodge  and 
one  or  two  other  original  "dupes,"  I  would  have  out- 
lived every  trace  of  suspicion  just  as  they  did  themselves. 
And  I  am  glad  to  give  evidence  at  this  late  date,  long 
after  all  of  them  are  dead,  that  they  were  as  innocent 
as  children  throughout  the  whole  transaction — were  the 
unhappy  victims  of  a  costly  confidence  in  men. 

But  as  I  took  a  pessimistic  view  of  things  in  general 
and  saw  fit  to  withdraw  from  public  view,  perhaps  I 
have  not  so  much  reason  to  complain  because,  in  my 
absence  from  the  world.  Dame  Rumor  was  busy  with 
my  name. 

Three  alleged  histories  of  San  Francisco,  which  pro- 
fess to  give  an  accurate  narrative  of  events,  devote 
much  space  to  the  diamond  field  fraud.  Considering  the 
mass  of  documentary  evidence  easily  accessible,  the  mis- 
statements of  many  facts  and  the  omission  of  others  is 
noteworthy  and  may  call  into  question  the  entire  accu- 
racy of  all  these  works.  To  go  no  further,  they  all 
agree  that  the  losses  of  stockholders  were  enormous, 
claim  that  they  brought  suit  in  the  State  of  New  Jersey 
against  Arnold  and  Slack,  but  never  recovered  a  cent. 

263 


The  Great  Diamond  Hoax 

Lent's  suit  in  Kentucky,  the  only  place  where  such  an 
action  could  he  maintained,  is  not  mentioned,  nor  the 
$300,000  which  Ralstcjn  contributed  to  make  good. 
Under  these  conditions  I  should  not  feel  hurt  because 
they  surmise  that  the  plot  was  conceived  in  the  "active 
brain  of  Asbury  Harpending." 

I  returned  to  Kentucky,  made  considerable  invest- 
ments in  agricultural  land  and  settled  down  to  play  the 
part  of  the  country  gentleman.  My  estate  was  one  of 
the  finest  in  Southwestern  Kentucky  and  became  a  cen- 
ter of  hospitality  in  its  region.  And  there  I  made  an- 
other grave  mistake — not  to  remain  content  with  the 
finest  existence  in  the  world,  that  of  an  independent 
owner  and  tiller  of  the  soil. 

It  was  while  I  was  living  in  my  new  home  in  Ken- 
tucky, at  peace  with  all  mankind  and  oblivious  of  the 
outside  world,  that  I  had  a  sharp  and  vivid  reminder 
of  the  unforgotten  past  when  the  papers  told,  one  day 
in  August,  1875,  of  the  failure  of  the  Bank  of  Califor- 
nia and  two  days  later  the  tragic  story  of  my  old  friend 
Ralston's  death. 


264 


MY    SISTER,    MRS.    O.    P.    ELDRED 

Who    is   well    known    In    the 

literary    world 


CHAPTER  XXXVI. 

Associates  Bar  Great  Financier  From   Conference 
AND  Soon  After  His  Body  Is  Found  in  the  Bay. 

Fortune    Plays    Cruel    Trick;    At    Height    of    Ralston  s 
Pozver  His  Big  Bank  Is  Forced  to   Close  Its  Doors. 

Ralston  succeeded  D.  O.  Mills  as  president  of  the 
15ank  of  California,  in  1872.  While  conceding-  the  titu- 
lar supremacy  to  another,  and  contenting  himself  with 
the  station  of  cashier,  Ralston  had  always  been  the  act- 
ual head.  In  all  matters  of  policy  and  large  accommo- 
dation his  word  was  law.  After  the  withdrawal  of 
Mills,  the  directors  practically  gave  him  a  free  hand. 

All  through  the  ascendancy  of  Ralston,  the  institution 
had  the  splendid  reputation  that  the  Bank  of  California 
enjoys  to-day.  It  not  only  possessed  the  fullest  confi- 
dence of  the  community,  but  ranked  as  one  of  the 
strongest  banks  of  the  United  States,  with  agencies 
throughout  the  civilized  world  and  unlimited  credit 
everywhere.  The  splendor  of  Ralston's  hospitality,  the 
immense  enterprises  in  which  he  was  engaged,  and  his 
vast  holdings  in  real  estate  and  corporate  concerns,  gave 
him  the  standing  of  a  man  whose  wealth  was  almost 
beyond  computation.  There  was  not  an  intimation  of 
embarrassment  when,  on  August  25,  1875,  the  Bank  of 
California  closed  its  doors. 

I  was  not  a  witness  of  what  followed.     I  was  living 

267 


The  Great  Diamond  Hoax 

(luictly  in  my  home  in  Kentucky.  But  from  what  I  have 
heard,  it  was  one  of  the  most  intense  moments  in  the 
history  of  the  \\"est.  For  blocks  around  the  Bank  of 
CaUfornia  stood  a  packed  mass  of  pale-faced  men,  an- 
ticipating ruin.  What  might  have  become  an  unpar- 
alleled panic  and  almost  universal  wreck,  was  happily 
averted  b}-  the  closing  of  the  stock  exchange  and  the 
practical  suspension  of  business  for  a  period  long  enough 
to  allow  the  community  to  catch  its  breath. 

Ralston  stood  the  ordeal  with  all  the  resources  of 
fortitude,  met  many  patrons  of  the  bank,  admitted  the 
grave  conditions  of  its  finances,  but  contended  that  its 
assets  were  very  large.  Everything  he  possessed  in  the 
world,  he  said,  would  be  used  to  make  good. 

On  the  afternoon  of  August  27  the  directors  called  a 
meeting.  Ralston  was  on  hand  as  usual,  but  was  barred 
froiu  attendance  by  D.  O.  Mills.  The  incident,  it  is 
said,  touched  him  to  the  quick.  Every  director  had 
profited  by  his  friendship  in  the  days  of  his  power  and 
prosperity.  This  seemed  a  harsh  return  in  the  hour  of 
his  deep  distress.  He  left  the  meeting  with  a  dazed 
and  haggard  face. 

He  proceeded  to  his  home  and  thence  to  North  Beach, 
where  he  was  accustomed  to  take  a  swim  in  the  bay 
when  the  weather  was  opportune.  There  are  a  number 
of  living  witnesses  of  what  followed.  Shortly  after  he 
entered  the  water  other  swimmers  noticed  that  some- 
thing was  amiss.  I  lis  body  did  not  sink,  but  he  was 
floating  face  downward.  A  boatman  was  quickly  at 
liis  side.  This  boatman  declared  that  the  banker  was 
>lill    living,      lie   that   as   it   may,   when   he    reached   the 

268 


Associates  Bar  Great  Financier 

shore  with  his  Ijiirdrn  the  once  master  spirit  of  the  Pa- 
cific Coast  was  dead. 

I  fow  ^reat  was  the  hold  that  Ralston  had  on  the 
hearts  and  minds  of  men  could  only  be  illustrated  by 
the  passion  of  grief  under  which  the  wdiole  city  bent. 
His  death  was  looked  on  as  a  common  calamity.  No 
spectacle  has  ever  been  witnessed  in  modern  times  such 
as  his  funeral  presented.  Wy  common  consent,  business 
of  every  kind  was  suspended  in  San  Francisco.  You 
might  say  that  the  population  of  the  city  of  more  than 
150,000  inhabitants  turned  out  en  masse.  The  proudest 
and  the  humblest  touched  shoulders  at  his  grave.  Such 
tribute  was  never  paid  to  any  potentate  or  prince. 

There  were  even  some  who  found  it  convenient  to 
make  an  exhibition  of  immoderate  sorrow  who  might 
have  been  more  fittingly  employed  elsewhere. 

I  once  heard  a  story  of  a  French  gentleman  who  had 
suffered  a  domestic  bereavement.  A  friend  met  him 
shortly  after  and  tendered  the  customary  condolences. 

"Ah !  My  poor  wife !  Yes,  it  was  indeed  a  great 
loss!"  sighed  the  h^renchman. 

'T  w^as  at  your  house  during  the  funeral,"  continued 
the  sympathetic  friend,  "and  was  deeply  touched  by  your 
manifestations  of  grief." 

"Ah !  You  saw  me  at  the  house,"  exclaimed  the  be- 
reaved Gaul.  "Many  thought  that  fine.  But  you  should 
have  seen  me  at  the  grave.     There  I  raised  hell." 

Very  much  in  the  same  way,  there  was  one  man  at 
Ralston's  obsequies  conspicuous  for  his  ostentatious  sor- 
row, who  was  more  responsible  for  his  downfall  than 
anyone  else  and  profited  largely  by  his  death.     But  after 

269 


The  Great  Diamond  Hoax 

the  funeral  he  was  able  to  speak  of  the  tragic  event  with 
much  fortitude  and  a  certain  degree  of  complacency. 
Ralston's  death,  he  said,  was  extremely  opportune — 
in  fact,  the  best  thing  that  could  have  hai)i)ened,  for  it 
made  easy  going  for  everyone. 

L')Ut  nothing  can  be  more  true  than  the  cynical  words 
that  Shakespeare  puts  into  the  mouth  of  ]\larc  Antony. 
The  evil  a  man  does  lives  after  him.  The  good  is  buried 
with  his  bones.  The  city  went  about  its  business,  for- 
got its  sorrow,  which  is  necessary  and  proper,  unless 
the  world  is  to  be  draped  with  perpetual  mourning 
weeds,  forgot  much  of  the  great  services  Ralston  ren- 
dered California;  although  to  this  day,  among  the  old- 
timers  and  their  descendants  his  name  still  stirs  a  thrill. 
But  all  his  human  weaknesses  have  been  remembered 
and  handed  down,  duly  magnified,  to  posterity. 

Not  only  that,  but  his  memory  has  been  assailed  by 
accusations  of  the  gravest  nature,  relating  to  the  failure 
of  the  Bank  of  California.  These  charges  reached  me 
in  Kentucky,  and  as  they  did  not  proceed  from  an  au- 
thoritative source  and,  moreover,  seemed  totally  incon- 
sistent with  the  character  of  my  old  friend,  I  made  a 
special  visit  to  the  Pacific  Coast  to  investigate  the  cir- 
cumstances immediately  ]:)receding  and  associated  with 
his  death,  for  the  better  satisfaction  of  myself  and  of 
the  world  at  large. 


270 


CHAPTER  XXXVII. 

Testimony  of  Eye-Witnesses  and  Experts  Refutes 
Story  That  Wm.  C.  Ralston  Took  His  Ow.v  Life. 

Ruined  Fhuuicicr  Had  Deeded  His  Property  to  ll'illiaiii 
Sharon,  Who  Forces  IVidotv  to  Accept  $2^0,000  as 
Payment  in  Full. 

Among  the  common  traditions  of  William  C.  Ral- 
ston's  death  is  the  story  that  he  committed  suicide  to 
escape  exposure.  Notwithstanding  the  fact  that  a  coro- 
ner's jury  found  on  ample  expert  evidence  that  he  died 
from  a  cerebral  attack,  and  the  further  incident  that 
a  life  insurance  company  promptly  paid  a  policy  of 
$50,000  to  his  widow — a  policy  void  by  express  terms 
in  the  event  of  suicide — this  impression  seems  to  persist 
to-day. 

When  I  came  to  California  for  first-hand  information 
concerning  my  old  friend's  tragic  end,  my  earliest  busi- 
ness was  to  investigate  the  cjuestion  of  self-destruction  ; 
for  if  it  were  a  fact  that  he  made  away  with  himself  at 
a  time  when  much  explanation  was  needed,  it  would 
have  had  assuredly  an  ugly  look.  The  evidence  was 
all  fresh  and  so  overwhelmingly  conclusive  of  death 
from  natural  causes  that  I  cannot  see  on  what  basis  a 
theory  of  suicide  was  reached,  unless  it  were  suggested 
by  ulterior  motives.  The  testimony  of  eye-witnesses  was 
that  the   swimmer   suddenly   collapsed   and   floated   witli 

271 


The  Great  Diamond  Hoax 

the  tide.  The  lungs  were  inllated  with  air,  not  with 
water,  as  in  eases  of  (h'owning;  otherwise  the  hody 
woulil  have  sunk.  The  features  liad  not  the  ghastly 
pallor  that  follows  water  sutToeation ;  on  the  eontrary, 
th(.\  were  suffused  and  livid  as  when  death  ensues  from 
a  hursting  l)lood  vessel  in  the  l)rain.  To  this  physieians 
gave  further  testimony.  Idie  sad  facts  were  plain 
enough.  For  many  days  Air.  Ralston  had  suffered  a 
mental  strain  against  which  the  human  machinery  is 
not  often  proof.  It  reached  the  crisis  when  he  was  ex- 
cluded from  the  meeting  of  the  bank's  trustees.  Then 
something  snapped.  Perhaps  the  plunge  in  the  cold 
waters  of  the  bay  hurried  on  the  catastrophe.  But  the 
baseless  story  of  Air.  Ralston's  suicide  ought  to  be 
finally  set  at  rest. 

The  inside  history  of  the  failure  of  the  Bank  of  Cali- 
fornia in  1875  has  never  been  told.  About  the  only 
definite  statement  ever  made  was  that  its  capital  stock 
of  $5,000,000  had  been  exhausted,  although  the  institu- 
tion had  resources  sufBcient  to  protect  depositors.  It 
was  rehabilitated  by  an  assessment  of  $100  a  share 
wliich  was  paid  by  the  stockholders,  giving  a  new  cap- 
ital of  $3,000,000.  I'ive  weeks  after  the  failure  it  re- 
o]XMied  its  doors,  with  almost  undiminished  i)restige, 
and  with  all  the  man\'  ups  and  downs  of  finance  has 
maintained  its  position  as  the  leading  commercial  bank 
west  of  the  Missouri  River. 

There  is  no  doubt  that  Mr.  Ralston  owed  large  sums 
of  money  to  the  bank,  growing  out  of  many  investments, 
some  of  which  were  disastrous.  In  tlujse  days,  what- 
ever may  be  said  of  the  practice,  it  was  the  commonest 

272 


Ralston  Not  a  Suicide 

thin,^'  for  l)ank  officers  to  make  loans  to  tlu'insclves.  Not 
only  that,  l)ut  the  ])racticc  was  in  full  swing  down  to 
the  time  of  the  failure  of  the  Safe  Deposit  Coni])any's 
Hank.  With  vast  visible  personal  resources  as  security 
for  loans.  Mr.  Ralston's  unlimited  credit  never  seems 
to  have  been  questioned  by  the  directors  of  the  Bank  of 
California.  Among  his  assets  were  a  half  interest  in 
the  Palace  Hotel ;  a  half  interest  in  the  Montgomery 
Street  Land  Company,  which  he  and  I  organized,  in- 
cluding the  Grand  Hotel,  and  most  of  the  frontage  on 
New  Montgomery  street ;  one-half  of  the  capital  stock 
of  the  Spring  Valley  Water  Works ;  one-half  interest 
in  the  Union  Milling  and  Mining  Company,  which  con- 
trolled the  reduction  of  ores  on  the  Comstock  Lode  with 
enormous  profits,  and  one-third  of  the  stock  of  the  Vir- 
ginia and  Truckee  Railroad,  which  holds  the  record  of 
earning  more  per  mile  than  any  railroad  in  the  world 
before  or  since.  I  should  say  that  a  conservative  esti- 
mate of  these  properties  alone  was  not  less  than  $15,- 
000,000.  Besides,  he  had  numberless  industrial  invest- 
ments, residences  and  immense  acreages  of  real  estate 
in  various  parts  of  California. 

After  I  left  San  Francisco  in  the  early  part  of  1873, 
Mr.  Ralston  engaged  in  many  costly  projects.  One  of 
these  was  the  purchase  of  the  Catholic  Church  prop- 
erty on  Market  street,  and  the  construction  of  the  Palace 
Hotel  thereon  by  himself  and  William  Sharon.  This 
alone  tied  up  $3,000,000  of  ready  money  on  his  account. 
It  is  known  that  he  lost  heavily  on  a  large  purchase  of 
stock  in  the  Ophir  Mining  Company,  upon  false  in- 
formation  that   the   great    Flood    and    O'Brien   bonanza 

273 


The  Great  Diamond  Hoax 

extended  into  its  territory.  Several  months  before  the 
faihire  he  saw  that  he  was  deeply  involved.  Mr.  Ral- 
ston realized  too  late  that  he  had  gone  too  far,  that  he 
was  beyond  his  depth.  He  made  efforts  to  secure  money 
on  his  great  holdings.  IJut  for  evident  reason  he  was 
compelled  to  go  slow.  The  spectacle  of  Ralston  as  a 
borrower  would  have  started  suspicion  at  once.  Loans 
were  attempted  through  outside  agents,  but  the  door  of 
accommodation  was  closed.  Rumor  has  attributed  this 
to  the  manipulation  of  the  Bonanza  firm,  but  a  much 
better  reason  can  be  given  than  that.  Nearly  all  the 
ready  capital  on  the  Pacific  Coast  was  tied  up  in  the 
wild  Comstock  speculation,  still  at  its  height.  There 
was  no  money  available  for  legitimate  investments  or 
loans  of  any  kind.  On  top  of  this  came  the  withdrawal 
of  many  large  accounts.  On  the  day  of  the  failure  more 
than  $1,000,000  were  unexpectedly  checked  out.  Under 
this  last  blow  the  bank  went  down.  So  far  as  the 
Bonanza  firm  was  involved,  its  members  were  personal 
friends  of  Ralston,  though  not  of  William  Sharon. 

Four  days  before  the  failure  Mr.  Ralston  made  a  deed 
to  William  Sharon,  conveying  ''all  and  singular  my  real 
and  personal  property  situated  in  the  City  and  County 
of  San  hVancisco  and  the  County  of  San  Mateo  and 
elsewhere  and  wheresoever  and  howsoever  situated,  to 
be  managed,  sold  and  otherwise  disposed  of  for  our 
joint  and  several  interests." 

What  was  the  disposition  of  this  vast  property?  No 
one  will  ever  know.  Was  part  of  it  used  to  repay  any 
indebtedness  of  Mr.  Ralston  to  the  bank?  Again  the 
record  is  silent. 

274 


Ralston  Not  a  Suicide 

Some  years  later  Mr.  Ralston's  widow,  who  is  still 
livint;',  brought  a  suit  against  William  Sharon  for  an 
accounting-  under  the  deed  of  her  deceased  husband. 
After  some  delay,  Mr.  Sharon  filed  a  general  answer  to 
the  efifect  that  the  property  coming  from  Mr.  Ralston 
into  his  hands  was  worth  about  a  million  dollars  less 
than  nothing.  But  he  offered  $250,000  in  full  settlement, 
and  to  avoid  the  endless  delay  of  litigation  and  expenses 
that  she  did  not  have  the  means  to  meet,  this  adjustment 
was  accepted  by  Mrs.  Ralston. 

Never  in  the  whole  history  of  finance  has  such  a  mys- 
tery attached  as  surrounds  the  failure  of  the  Bank  of 
California  and  the  disappearance  of  Ralston's  fortune. 
My  own  firm  belief  is  that  had  his  life  been  spared 
another  month,  he  would  have  emerged  from  all  his 
difficulties  with  a  clean  sheet.  James  R.  Keene,  a  trus- 
tee of  the  Bank  of  California  and  the  only  one  who 
seemed  inclined  to  speak,  made  a  printed  statement  that 
upon  an  examination  of  Mr.  Ralston's  assets  he  was 
justified  in  stating  that  they  were  sufficient  to  pay  all 
his  debts  of  every  kind  and  leave  a  balance  of  $3,000,- 
000  to  his  family ;  and  it  is  worthy  of  remark  that 
Keene  had  a  very  clear  business  head. 

No  one  seemed  anxious  to  know  the  facts.  Quite 
the  contrary  was  the  case.  When  I  proceeded  to  gather 
information  of  a  most  important  character,  J.  D.  Fry, 
uncle  of  Mrs.  Ralston,  commanded  me  in  the  name  of 
the  family  to  cease.  To  this  I  had  to  bow.  But  Mrs. 
Ralston  is  here  to  say  whether  her  kinsman  was  her 
faithful  friend  or  not. 

Even   Mr.   Ralston's  private  papers   and  personal  ac- 

275 


The  Great  Diamond  Hoax 

counts  were  seized,  .'ind  (lisa])pcarc'(l.  In  some  wavs  he 
was  a  secretive  man.  (  )nce  he  asked  me  to  send  a  clieck 
to  A.  A.  Cohen  for  $3.CC0  each  month  until  ordered 
(Hscontinued.  1  followed  instructions  till  the  total 
amounted  to  over  $100, CCO.  yet  I  never  had  an  inkling 
what  the  i)ayments  were  for.  Thus,  it  was  currently 
believed  that  he  had  many  interests  in  other  peo])le's 
names.  ATrs.  Ralston  well  remembers  that  her  husband 
took  her  to  inspect  a  fine  business  block  in  process  of 
completion,  which  he  told  her  was  his.  After  his  death 
the  title  to  this  same  property  stood  in  the  name  of 
another,  and  in  that  family  name  it  stands  to-day. 

There  were  many  wild  rumors  of  wrongdoing  that 
followed  the  failure  of  the  Bank  of  California.  The 
only  one  deserving  notice  is  this  :  that  Mr.  Ralston  over- 
issued and  marketed  stock  of  the  liank  of  California. 
Without  any  evidence  to  support  it  that  would  be  re- 
ceived in  any  court,  this  unfounded  charge  has  received 
an  astonishing  credence,  for  I  can  find  nothing  to 
support  it  except  absolutely  irresponsible  hearsay.  Be- 
sides,  it   is  contradicted  by  unquestioned   facts. 

Mr.  Ralston  had  no  reason  to  over-issue  any  stock. 
He  had  oceans  of  prime  securities.  What  he  needed 
was  cash,  not  certificates  of  shares.  His  50,000  shares 
of  S])ring  \  alley  alone  had  a  selling  market  value  at 
that  time  of  $5,000,000,  nearly  twice  as  nuich  as  the 
bank  started  business  with  later  on.  The  money  sim- 
])1\-  \\a~>n"t  in  the  town  to  realize  on  even  that  splendid 
securit}'.     dhat's  how   Ralston  and  the  bank  went  down. 

In  a  way.  my  ac(|uaintance  with  Mr.  Ralston  was 
somewhat   tragic.      With   the   best   intent  on   either  side, 

276 


Ralston  Not  a  Suicide 

something-  always  went  wrong.  It  changed  the  whole 
character  and  purpose  of  my  life.  lUit  I  only  recall  him 
as  a  most  loyal,  consistent  friend,  a  financier  with  a 
very  nice  sense  of  honor  and  an  exemplar  of  candid 
courtesy.  It  seems  to  me  the  time  has  come  when  tardy 
justice  should  Ije  done  to  the  memory  of  one  of  Cali- 
fornia's most  illustrious  pioneers,  who  loved  his  State 
as  no  man  of  station  has  loved  it  since,  and  to  whom 
the   ])resent  generation   owes  nnich. 


277 


CHAPTER  XXXVIII. 

Author  Tries  Luck  in  Wall  Street  and  Makes 
Big  Fortune,  Only  to  Lose  It  in  Mining  Invest- 
ments. 

Silz'cr  Falls  inid  Land  Slides,  But  Disaster  Fails  to  Dis- 
courai:^c  Man   Who  Has   Outlived  Old  Associates. 

All  the  various  people  of  the  story  have  been  ac- 
counted for  and  decently  retired.  Before  the  curtain 
falls  I  have  just  a  word  to  say  about  myself  to  those 
who  have  followed  the  narrative  of  sixteen  tempestuous 
years  from  1857  to  1873. 

The  role  of  a  Kentucky  country  gentleman  was  not  to 
my  liking.  As  I  have  said,  I  sold  out  everything  and 
retired  from  California  after  the  bursting  of  the  diamond 
bubble.  I  resolved  that  nothing  should  tempt  me  again 
into  an  active  career.  But  the  lure  of  the  busy  world 
was  more  potent  than  I  realized.  After  a  few  years  of 
the  simple  life  I  made  my  headquarters  in  New  York, 
studied  and  grasped  the  investment  and  speculative  mar- 
kets, and  became  one  of  the  recognized  figures  of  Wall 
Street. 

Good  fortune,  as  a  rule,  attended  my  ventures.  Some- 
times the  tide  turned  the  other  way,  but  I  think,  taking 
one  year  with  another,  each  saw  my  assets  materially 
increased.  At  one  time  I  was  worth  very  near  if  not 
quite  four  million  dollars,  which  is  distinctly  more  than 

278 


THE    AUTHOR 

At  the   period   of   his   Wall   Street 

operations 


Author  Tries  Luck  in  Wall  Street 

any  man  ought  to  have.  But  when  one  is  fairly  gone 
in  the  money-making-  intoxication  he  never  knows  when 
to  stop,  any  more  than  the  victim  of  alcohol. 

When  I  was  at  the  zenith  of  my  good  luck  I  was 
induced  to  invest  in  two  mining  properties  in  the  United 
States  of  Columbia,  South  America.  One  was  an  im- 
mense silver  mining  district,  the  other  a  great  hydraulic 
proposition  with  almost  fabulous  gold-bearing  gravel 
resources.  Both  were  passed  upon  favorably  by  the 
ablest  experts  that  money  could  hire.  The  reports  were 
justified  by  the  facts,  yet  both  projects  ended  in  ruinous 
disaster  to  me. 

I  was  drawn  into  a  much  larger  investment  than  I 
contemplated.  As  I  developed  the  silver  property,  the 
economy  of  a  much  larger  plant  and  the  ownership  of 
adjacent  mineral  territory  became  self-evident.  There 
appeared  no  element  of  risk.  Silver,  after  various  fluc- 
tuations, seemed  to  have  reached  a  firm  level.  I^nan- 
cial  experts  were  in  accord  that  the  price  of  the  white 
metal  could  not  possibly  go  lower,  was  much  more 
likely  to  advance  than  to  recede.  Even  with  silver  at  80 
cents  an  ounce,  the  profits  on  my  mining  operations 
would  be  enormous.  I  figured  to  clear  such  profits  that' 
in  a  few  years  I  would  receive  back  my  capital  invest- 
ment and  own  a  property  with  an  earning  capacity  of 
millions.  In  fact,  during  the  period  of  practical  opera- 
tion these  estimates  were  fully  borne  out. 

Then  something  happened.  Without  a  note  of  warn- 
ing to  the  commercial  world,  Great  Britain  closed  the 
mints  of  India  to  the  coinage  of  silver.     As  long  as  this 

281 


The  Great  Diamond  Hoax 

vast  Oriental  market  was  open,  the  value  of  silver  was 
secure.  When  it  closed,  like  the  snapping  of  a  trap,  a 
panic  followed  which  did  not  end  until  the  price  was 
squarely  cut  in  two.  I  could  not  produce  an  ounce  of 
bullion  without  an  actual  loss.  An  immense  investment 
became  instantly  valueless.  Nearly  three  million  dollars 
vanished  into  thin  air  with  the  scratching  of  a  pen. 

The  hydraulic  mining  project  fared  no  better.  The 
gold  gravel  deposit  appeared  humanly  inexhaustible.  All 
the  physical  conditions  seemed  favorable.  \\"ater  had 
to  be  brought  in  a  ditch  for  twenty-three  miles.  Most 
of  the  ditch,  carrying  10.000  miner's  inches  of  water, 
was  completed.  Then  something  happened  again.  For 
nearly  a  mile  at  its  upper  end  the  line  of  the  ditch  ran 
along  a  rather  steep  hillside  of  shale  foundation.  When 
the  surface  was  broken,  the  whole  mountain  seemed  to 
get  in  motion.  Millions  of  tons  slid  down,  bringing  to 
naught  every  eiTort  of  our  engineers.  Money,  as  a 
rule,  will  in  the  end  conquer  every  physical  obstacle. 
But  about  this  time  a  third  thing  happened,  most  serious 
of  all :  my  funds  ran  so  low  that  to  continue  the  enter- 
prise further  meant  an  invitation  to  a  final  and  com- 
plete disaster. 

My  fortune  was  not  lost.  It  is  still  intact,  buried  in 
the  mountains  of  the  United  States  of  Colombia.  I  have 
no  doubt  that  some  adventurous  speculator  of  the  fu- 
ture, under  happier  conditions,  will  dig  it  out. 

Since  then  I  have  been  a  miner  and  dealer  in  mining 
properties,  with  the  common  average  of  the  miner's  ups 
and  downs.     Much  of  my  time  has  been  devoted  to  the 

282 


Author  Tries  Luck  in  Wall  Street 

mother  lode  of  California,  where  I  own  a  proj:)erty  that 
has  an  immense  future. 

******* 

I  am  an  old  man  now — in  years.  l)ut  not  in  ho])e.  1 
have  outlived  not  alone  nearly  all  my  contemporaries, 
covered  by  this  narrative,  but  the  turljulence  and  ardor 
of  my  early  years  as  well.  But  while  many  illusions 
inseparable  from  the  imagination  of  a  robust  and  enter- 
prising youth  have  disappeared,  I  still  have  very  definite 
ambitions  to  pull  off  one  more  suri)rise  on  the  world  be- 
fore the  close.  There  may  yet  be  a  sequel,  another 
chapter  to  the  story  to  which  may  be  attached  more 
fittingly  than  now  the  sad  word  that  marks  the  con- 
clusions of  all  things  human — 

(The  End.) 


[The  above  was  written  nearly  two  years  ago.  Since 
then  Mr.  Harpending's  ambition  has  been  realized.  He 
sold  one  of  his  mines  on  the  Mother  Lode  and  after 
many  fluctuations  of  fortune  is  again  the  possessor  of 
ample  means.  One  of  his  last  and  best  friends  was 
John  A.  Finch,  of  Spokane,  to  whom  this  volume  is  dedi- 
cated. Just  as  the  forms  were  going  to  press,  word 
came  of  the  sudden  death  of  this  good  gentleman  in 
Idaho.  He  took  great  interest  in  the  publication  of  this 
book,  which  he  can  never  read. — Editor.] 

283 


THE    LATE    JOHN    A.    FINCH 
Who    possessed    all    the    qualities    of    a    good    man    and    many    of    the    qualities 

of    a    great    man. 


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